Growth, recessions, fiscal policy, monetary policy, currencies and global business deals. GIS experts provide forecasts and potential scenarios for all of the economic trends that shape geopolitics.
U.S. interest rates: Where will they take us?
U.S. President Donald Trump worries that the Federal Reserve is raising interest rates too quickly. In fact, the Fed has engaged in only moderate tightening so far. By mid-2019, it is likely to end the cycle and hold rates steady, since the U.S. central bank is probably focusing on restricting the money supply rather than reaching an interest rate target. At that point, Mr. Trump will no longer be able to blame the Fed for any fiscal trouble and will have to implement reforms if he wants to spur growth.
GIS Dossier: Japan’s search for an energy strategy after Fukushima
Since the 2011 Fukushima Daiichi accident, Japan has sharply decreased its reliance on nuclear energy. Following years of deliberations weighing nuclear’s inherent risks against the expense of energy imports and climate protection obligations, the government of Prime Minister Shinzo Abe has decided that by 2050, about one-fifth of the country’s power will be coming from strictly regulated nuclear facilities.
Vocational lessons from Germany and France
Germany is praised as a model of vocational training, with youth unemployment of just over 6 percent. France, where 22 percent of young people don’t have jobs, has long known that its own vocational education system needs fixing. A comparison of how these two great European economies prepare pupils to become future employees may provide a useful guide for other countries.
China’s threat to Russia’s Far East: Real or perceived?
The vulnerability of Russia’s Far Eastern and Siberian regions to Chinese expansion has become a truism. Yet most Russians seem to favor closer ties with China, and bilateral relations may be at their best in history, without a trace of military or political tension. There are also few signs of Chinese economic penetration, at least on a level that exceeds Japan’s or South Korea’s. Migration pressure from China into the underpopulated Russian north may be the hollowest of these popular myths.
Japan’s growing concern about energy security
Save for renewables, Japan is devoid of domestic energy sources. Since its nuclear power sector has been reduced to only a minor contributor in the energy mix, the country has had no choice but to increase its imports of hydrocarbons and fall back on its societal and technological strengths to tackle the energy-security challenge in the long term.
‘Overbanking’ in Europe
While American banks recovered from the 2008 financial crisis, lenders in Europe have languished. Contrasting regulatory approaches and economic environments account for some of the differences, but European banking authorities have their own explanation: “overbanking.” Their reasoning is odd, not least because the European Union’s banking sector is shrinking.
Opinion: A road map for peace in the Middle East
Iran, Saudi Arabia, Turkey, Egypt and Israel are all vying for supremacy in the Middle East through direct confrontation and proxy wars. This may trigger an all-out conflict with dire consequences for the region and for Europe. Reversing the logic of war and replacing it with cooperation is difficult but possible, as all the involved parties stand to gain from it.
Two scenarios for the future of U.S.-China relations
There are no longer any illusions that the U.S. sees any potential in partnership with China. The two countries have entered into a strategic competition that in the worst case, could quickly become a cold war-style confrontation. Negotiation on the biggest economic sticking points could ease tensions, but only for the short to medium term. The emerging rivalry of the two powers is with us to stay.
Real economies and financial markets: Outlook for 2019
Financial markets are hesitant, as many sources of concern pile up on analysts’ desks. This report argues that the future of the world economy depends on three sets of variables: policymakers’ ability to adjust to the end of generous monetary policies and profligate fiscal practices; their willingness to recognise the need to engage in structural reforms and act accordingly; the possibility that significant shocks occur – such as a crash in China or an all-out trade war.
The U.S. and China: The trade war and the broader confrontation
As the “trade war” between the U.S. and China looks set to last, it is time to ask if the confrontation is more about “war” than “trade.” In fact, China is simply carrying on the ideological battle initiated by the Soviet Union in the 20th century. This time, however, with its hybrid totalitarian-capitalist system, Beijing is a more formidable foe. For now, the pragmatic Chinese may back down for strategic reasons, but in the long term, the showdown is likely to intensify.