Global investment prospects face multiple risks
Thursday, April 4, 2019
Significance
The research highlights increasing corporate power, and tariff and non-tariff barriers, and raises the prospect that if unchecked these trends will reduce investment and trade. Particularly, they risk ruining the multi-decade investment momentum fuelled by the falling relative price of tradable goods.
Impacts
- Regulation could cut the profitability of major US tech firms and the wages they pay, reducing consumer spending disproportionately.
- A US-China goods trade deal will have scant impact on curbing the worldwide rise of non-tariff barriers.
- Policymakers are likely to focus on short-term reflation ahead of labour and product market reforms.