ECONOMIC AND MARKET OVERVIEW
The last 15 years represent a truly remarkable time in the global economy and markets.
From the Bear Sterns leverage credit hedge funds collapse in 2007 to the war in Ukraine, the last decade and a half has truly tested the resilience of investors. As Mark Twain said, history does not repeat itself, but it often rhymes. In a recent conference, Goldman Sachs highlighted five key themes reshaping economic and investment cycles. These are deglobalisation, the move to net zero carbon emissions, changes in demographics, digitisation and geopolitics.
In their view a partial reversal in globalisation is likely to structurally boost inflation. The contribution of goods traded across borders to global GDP has more than halved over the last decade and the flow of capital and labour between countries has also slowed. These trends are likely to have a slowing impact on what the Austrian economist Joseph Schumpeter calls disruptive innovation- a phenomenon which has helped lower global inflation over the last two decades.
