Zhu Min: The global economy will face many policy turning points in the next decade

“The global economy will usher in many turning points in economic policies in the next ten years. Interest rate risk, exchange rate risk will become the most important risk to the world economy.” Zhu Min, dean of the National Institute of Financial Research at Tsinghua University and former deputy governor of the central bank, said that he believes that after the 2008 financial crisis, the global economic structure has undergone major changes, looking for new labor productivity Growth has become the primary proposition of the global economy. As many global economic policies reach turning points, the world economic structure will experience more challenges.

Some new trends have emerged in the world economy over the past decade. First, there are major changes in global demographic structure. In total, the global population continues to grow. This year it is 7.4 billion people, and it is expected to reach 11 billion in 2100. However, the population distribution is uneven, which means that future global GDP growth will shift from places with high per capita to places with low per capita. At the same time, the global population is aging rapidly. Data show that the burden rate of the elderly population in the United States was about 22% in 2015, and this proportion will reach about 32% in 2025. Zhu Min believes that the above two points will change the basic global economic and financial pattern in the next 50 years.

Theglobaleconomycontinuestobecomelighter.Inthepasteightyears,theproportionoftheserviceindustryintheUnitedStatesandemergingeconomiccountrieshasgraduallyincreased,whiletheproportionofmanufacturinghasdeclined,andmanufacturingdemandischanging.Atthesametime,investmentindevelopedcountriesfellsharplyafterthefinancialcrisis,andeconomicgrowthcanonlybedrivenbyconsumption.InZhuMin’s view, without new growth in labor productivity, if the population continues to age, it will be impossible to use more wealth to support the needs of people in an aging society in the future, and it will be difficult to change the uneven income distribution. Therefore, in the next ten years, finding new growth points for labor productivity will be the top priority.

The world economy is experiencing a series of policy turning points. Zhu Min believes that this will continue to affect future economic and financial structural changes.

What has attracted much attention is Trump’s economic policies. Generally speaking, it can be summarized as follows: “tight” monetary policy promotes a strong dollar by raising interest rates; at the same time, “loose” fiscal policy creates aggregate growth through infrastructure investment, etc. Requires space. Although the policy has not yet been implemented, it has changed market expectations. This is also an important turning point in promoting current economic and financial changes.

Under Trump’s policy expectations, the monetary policies of major central banks have diverged, and currency market exchange rate fluctuations are increasing. “Because of Trump’s tight monetary policy, global interest rates have changed. The current problem is not how many times the Fed’s interest rates have risen, but that the interest rates have changed from a downward channel to an upward channel. , this is particularly important. Now interest rates will only go up, not down, this concept is particularly important. At this time, the liquidity inflection point begins to appear as the interest rate level adjusts.” Zhu Min emphasized.

But it will be fiscal policy that dominates the economy. “Because fiscal policy stimulus is subject to political constraints, there is great uncertainty, and monetary policy is relatively transparent, which is an inflection point for policy changes. At the same time, globally, the income distribution gap is showing a widening trend, which will also change the previous Many economic policy expectations.” Zhu Min said.

Zhu Min emphasized that overall, the global economy will undergo some major changes in the next ten years, such as liquidity turning points and fiscal policy turning points. Global interest rate risks and exchange rate risks will become the main risks of the global economy. .

(Original title: Zhu Min: The global economy will face many policy turning points in the next ten years)

(Editor: DF319)