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.
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/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”.
InternationalEconomyComingAgeofScarcity
This INET Working Paper, posted on 26 January 2023, is based upon an earlier presentation. White’s general premise is that our economic, political, public health and environmental systems are all complex, adaptive systems and each is showing clear signs of distress. Moreover, problems in any one system could easily spread to other systems in a “cascade of tipping points”. In this particular paper, White suggests that existing stress in our economic/financial system is likely to be made worse by a multitude of future, negative supply shocks. In turn, these economic problems might pose a threat to the democratic order in some countries. The paper finishes with reflections on policies that might help to stabilize the situation.
The C D Howe Institute in Toronto published on 5 December an Intelligence Memo written by William White. Essentially a short letter written to the Canadian Minister of Finance, the Memo identifies six sets of negative, future supply shocks that will put upward pressure on Canadian prices in the next few years. Adding to the difficulties, the Memo also identifies a number of sectors where higher investment spending will be required – not least to deal with environmental issues. To mitigate inflationary pressures, and to avoid a potentially dangerous reliance on tighter monetary policy, White implies that consumption should be constrained through targeted fiscal measures.
This article was published in the Summer 2022 edition of The International Economy. William White notes that forecasts to date which have predicted the demise of the US dollar have been wildly inaccurate. Nevertheless, the arguments supporting those earlier forecasts remain valid and may even have strengthened over time. White suggests there are reasons (solid) for anticipating another global economic and financial crisis, and for believing (less solid) that this could finally trigger a dollar crisis as well.
InternationalEconomyIsaDollarCrisisComingSummer2022William White wrote the Forward for a New Zealand Initiative publication, authored by Graeme Wheeler and Bryce Wilkinson, in which they contend that expansionary central bank policies contributed significantly to the global inflationary pressures which have emerged in recent years. In his Forward, White agrees that the analytical framework used by many central banks is fundamentally flawed. Not least, central banks have for decades underestimated the importance of recurrent shifts in the supply capacity of the global economy.
The C D Howe Institute published on 10 May an Intelligence Memo written by William White. It provided a succinct summary of the webinar, presented to members of the Institute in mid April, which is also on this website.
On November 18, the Canadian International Council (CIC) posted on their website a paper prepared earlier by William White for the Council for Economic Policies, a think tank in Zurich. White had made a presentation in July, based in large part on that paper, to a joint meeting of the CIC and the Konrad Adenauer Stiftung. His notes for that meeting are also attached below.
CanInternatCommitteeJuly2021pdfhttps://thecic.org/if-something-cannot-go-on-forever-it-will-stop/
At the end of March, the Council on Economic Policies (a Zurich based think tank) posted this piece written by William White. White identifies the many challenges, actual and emerging, threatening the future of our democratic, market based systems and indeed of mankind itself. Our economic, political, environmental and health systems are all showing increased signs of stress and any one of them might “stop”. Since all of these systems are interrelated, problems that emerge in one system will threaten the other systems as well. White describes the key characteristics of more sustainable systems, and suggests policies that might be required to move from the unsustainable path we are on currently to a path that would actually leads us to where we want to go.
CEPWillStopFinal