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Renewing America

Ideas and initiatives for rebuilding American economic strength.

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Showing posts for "Michael Spence"

Delivering on Promises to the Middle Class

by Michael Spence
General Motors assembly workers work on an all new 2013 ATS Cadillac luxury vehicle (Rebecca Cook/Reuters).

This article was co-authored with David Brady, Deputy Director and Senior Fellow at the Hoover Institution and Professor of Political Science at Stanford University.

MILAN – US President Donald Trump owes his electoral victory largely to the older white middle- and working-class voters who have missed out on many of the benefits of the economic-growth patterns of the last three decades. Yet his administration is preparing to pursue an economic program that, while positive in some respects, will not deliver the reversal of economic fortune his key constituency was promised. Read more »

Europe or Anti-Europe?

by Michael Spence
Euro coins are seen in front of displayed flag and map of European Union (Dado Ruvic/Reuters).

MILAN – A knowledgeable friend in Milan recently asked me the following question: “If an outside investor, say, from the United States, wanted to invest a substantial sum in the Italian economy, what would you advise?” I replied that, although there are many opportunities to invest in companies and sectors, the overall investment environment is complicated. I would recommend investing alongside a knowledgeable domestic partner, who can navigate the system, and spot partly hidden risks. Read more »

Donald Trump and the New Economic Order

by Michael Spence
A TV screen showing Donald Trump is pictured in front of the German share price index (Kai Pfaffenbach).

HONG KONG – Since the end of World War II, the hierarchy of economic priorities has been relatively clear. At the top was creating an open, innovative, and dynamic market-driven global economy, in which all countries can (in principle) thrive and grow. Coming in second – one might even say a distant second – was generating vigorous, sustainable, and inclusive national growth patterns. No more. Read more »

How Inequality Found a Political Voice

by Michael Spence
A voter peels off an "I Voted" sticker after voting (Chris Keane/Reuters).

MILAN – It took a long time for widening inequality to have an impact on politics, as it suddenly has done in recent years. Now that it is a central issue, national economic priorities will need to shift substantially to create more equitable, inclusive economies and societies. If they do not, people could embrace explosive alternatives to their current governments, such as the populist movements now sweeping many countries. Read more »

Escaping the New Normal of Weak Growth

by Michael Spence
Euro banknotes and a calculator are placed on a currency graph and ticker (Dado Ruvic/Reuters).

MILAN – There is no question that the recovery from the global recession triggered by the 2008 financial crisis has been unusually lengthy and anemic. Some still expect an upswing in growth. But, eight years after the crisis erupted, what the global economy is experiencing is starting to look less like a slow recovery than like a new low-growth equilibrium. Why is this happening, and is there anything we can do about it? Read more »

How to Fight Secular Stagnation

by Michael Spence
Construction workers work on a taxiway bridge for airplanes (Kai Pfaffenbach/ Reuters).

MILAN – Much of the world, especially the advanced economies, has been mired in a pattern of slow and declining GDP growth in recent years, causing many to wonder whether this is becoming a semi-permanent condition – so-called “secular stagnation.” The answer is probably yes, but the question lacks precision, and thus has limited utility. There are, after all, different types of forces that could be suppressing growth, not all of which are beyond our control. Read more »

Growth in a Time of Disruption

by Michael Spence
A man walks past various currency signs (Yuya Shino/Reuters).

FORT LAUDERDALE, FLORIDA – Developing countries are facing major obstacles – many of which they have little to no control over – to achieving sustained high growth. Beyond the headwinds generated by slow advanced-economy growth and abnormal post-crisis monetary and financial conditions, there are the disruptive impacts of digital technology, which are set to erode developing economies’ comparative advantage in labor-intensive manufacturing activities. With the reversal of these trends out of the question, adaptation is the only option. Read more »

Brexit in Context

by Michael Spence
Two activists with the EU flag and Union Jack painted on their faces kiss each other to protest against British exit from the European Union (Hannibal Hanschke/Reuters).

MILAN – I do not believe that foreigners contribute usefully by issuing strong opinions about how a country’s citizens, or those of a larger unit like the European Union, should decide when faced with an important political choice. Our insights, based on international experience, may sometimes be helpful; but there should never be any confusion about the asymmetry of roles. Read more »

Reigniting Emerging-Economy Growth

by Michael Spence
People are silhouetted against a backdrop projected with the picture of various currencies of money (Kacper Pempel/Reuters).

HONG KONG – It is no secret that emerging economies are facing serious challenges, which have undermined their once-explosive growth and weakened their development prospects. Whether they return to the path of convergence with the advanced economies will largely depend on how they approach an increasingly complex economic environment. Read more »

Managing Debt in an Overleveraged World

by Michael Spence
A woman holding an umbrella walks in front of an electronic board displaying various countries' stock price index outside a brokerage in Tokyo (Issei Kato/Reuters).

MILAN – What ever happened to deleveraging? In the years since the 2008 global financial crisis, austerity and balance-sheet repair have been the watchwords of the global economy. And yet today, more than ever, debt is fueling concern about growth prospects worldwide. Read more »