On 22 November, William White was honored to present the 2023 Sylvia Ostry lecture as a webinar for the CD Howe Institute in Toronto, Canada. He began by noting that he shared Sylvia Ostry’s view that the economy was a complex, adaptive system nested within other such systems. He then proceeded to show that this insight had important lessons for policy makers. White then provided evidence that we were moving from an age of plenty (disinflation) to one of scarcity (inflation), and that pressure for higher real rates would be significant. This pressure would arise from the conjuncture of  lower growth potential with the need for higher investment to meet such challenges as climate change. White finished by suggesting a number of “unpalatable” supply side and fiscal reforms that might lower the danger of “disastrous” outcomes.

William White’s January 2023 INET Working Paper, “What next for the global economy: Could negative supply shocks disrupt other fragile systems?”, has just been published by Palgrave Macmillan as the Introductory essay in a book. The book’s title is “Fault lines after covid-19: Economic challenges and opportunities”,  edited by R Z Aliber, M Gudmundsson and Gylfi Zoega. A link to the publisher can be found below.

https://www.amazon.co.uk/Fault-Lines-After-COVID-19-Opportunities-ebook/dp/B0C3X2315N/ref=sr_1_2?crid=3SVSDVG9ZX8M6&keywords=aliber+zoega&qid=1697368141&sprefix=aliber+zoega%2Caps%2C105&sr=8-2

The Global Risk Institute in Toronto has just posted the paper linked below. It suggests that at least three conditions will have to be satisfied to meet the global challenge of mitigating climate change. We need to know what we should do. We need to have the power to actually do what needs to be done. Finally, we need the will to act, to do what we should do. The paper focuses on current impediments to meeting each of these three challenges. The paper finishes by discussing the possibility that we are inadvertently (“sleepwalking”) towards a polycrisis; that is, the possibility of a cascade of tipping points in a number of systems (economic/financial, political and environmental) that are each fragile and are also nested within each other. The second link is to a video recording of my session at the GRI Summit 2023.

https://globalriskinstitute.org/publication/mitigating-global-warming-is-not-our-only-problem-are-we-sleepwalking-towards-a-global-polycrisis/

https://globalriskinstitute.org/event/sleepwalking-towards-a-global-polycrisis-gri-summit-2023/

This article was recently published in the Summer edition of “The International Economy”. It suggests that we are moving from an “Age of Plenty” to an “Age of Scarcity”. For the last few decades we have benefited from a variety of positive supply shocks. Unfortunately, every one of these shocks has now turned negative. Moreover, there is now  a need for much higher investment levels to minimize the effects of these negative shocks. The legacy of this fundamental change will be that inflationary pressures will prove more persistent that currently anticipated, that consumption must suffer and that interest rates will stay “higher for longer”.