Welcome to the future. I have to confess it didn’t even occur to me that we’d be soon starting a new decade when I last sent out the links (yes, pedants, I know: the new decade ends at the end of this year, but there comes a point where you just have to stop fighting); the last couple of years have, after all, felt less like Back to the Future and more like Groundhog Day. Still, to start the year off and in concession to the new page in the calendar, I thought I’d have a go at structuring the links around a few predictions for the future.
- Let pessimistic Ranil start. The 2020s will not, in the advanced economies, see a reversal of the ‘disappointing’ growth of the last ten years. It might creep up a bit, but we should get comfortable with the idea of (often substantially) sub-3% real GDP growth for a while. Why? I think there is a lot to the arguments Dietrich Vollrath has been laying out over the last few years, and has collected in his forthcoming (must-buy) book, Fully Grown. It is not a sign of failure that growth is slowing, but of success: we have accumulated so much, and made so many gains to productivity and material well-being, that much of what we have turned our attention to is no longer designed to feed us and make more stuff we need – instead we want to make life more liveable, and attention is turning to increasing choice. Meanwhile innovations are not necessarily marketed and hence do not show up in the GDP numbers – at least not directly – think of Wikipedia. Dietz writes here about why slowing business dynamism may, too, be a symptom of a successful economy, rather than a harbinger of doom. The negative side of this argument is Tyler Cowen’s who argues that we have exhausted all of the easy gains to productivity, and those that remain (like open borders) appear beyond the limits of our social preferences.
- And as an antidote to that, a ray of sunshine: deep and entrenched structural inequalities will be substantially eroded in the next ten years. You might ask why I’m optimistic here, when in the last few weeks, I’ve read (deep breath): about the way the econ profession has a particularly deep blind spot on black women; that women are less likely to rate their own performance in maths as competent, even when they observe their own high test scores; that female authors of research are less likely to claim that their results are important or unique and both male and female referees hold women to higher standards; that the AEA meetings show a discipline making small steps, not big strides; that discrimination against minority candidates in jobs may be underestimated by many studies; and that single women do substantially worse in the housing market than single men. But this itself is one reason to be optimistic: I have never in my life read so much about these problems as I do now. Brilliant people are thinking about the world differently, and this is a first step towards change.
- I also predict that in the next ten years, the Technocrats will Strike Back. It won’t be nearly as cool as Star Wars Episode V, I think the value of independent advice or actors will become increasingly apparent. Garret Jones’s forthcoming book, 10% Less Democracy has a provocative title, but if you read this e-mail you probably already believe in an independent Central Bank, and that evidence has a place in policymaking. As the world becomes more complex and our problems more difficult, does this become more or less true? Diane Coyle suggests intervention may become more necessary – it is likely to also be harder.
- My last prediction is this: that the best people will still get lots wrong. 538 revisit the biggest mistakes they made this year in their political commentary, and Michael Spence discusses the changes he never saw coming. Unfortunately, those who are most transparent in their work are probably going to be shown up the most, too, but I hope that doesn’t serve as a disincentive. I think my biggest mistake last year was to underestimate the resilience of zombie ideas: things I thought were dead kept coming back, and unlike the Janets, they don’t improve. I need to call Ash.
- I don’t have a prediction around these two, but I do recommend reading them. First, Markus covers a new paper which shows how intra-household inequality traces through to mortality among women in India. And secondly, a VoxDev piece raises the bar beyond poverty, suggesting that a healthy diet, rather than one that keeps you alive, may be a more appropriate aspirational target.
- Finally, The Rise of Skywalker was a massive disappointment (as Matt said, my god it felt like it was written by an algorithm in Disney studios), but it did prompt this: what does the Resistance need to do in order to govern effectively after defeating the First Order? Pop culture has never bettered Deadwood as an investigation of state building, but I’d watch a Star Wars movie about economic policy and governance. Yes, I am a geek. I predict this will not change in the next decade.
Have a great weekend, everyone!