Asking the questions that shape our world

If a rising tide lifts all boats, then economics provides a framework to not only lift the tide but maintain it. Can economic theories avoid conflict? How can we guarantee protection and employment for all? Nobel Laureates share their insights into the forces driving global change.

How will politics shape markets?
We expect politics to play an outsize role in 2024. The US presidential election, the ongoing Israel-Hamas and Russia-Ukraine wars, and the rivalry between the US and China could all affect markets globally. Investors should prepare for bouts of politically driven volatility and consider hedges.
What will a maturing Chinese economy mean for investors?
A new normal is coming into view for China. Constraints on old growth drivers and a new focus on higher-quality growth will likely temper its GDP growth toward a 4–4.5% pace over the next decade. For investors, this means a greater long-term focus on sectors aligned with the country’s efforts to boost its tech self-sufficiency, localize mass consumption, upgrade its high tech and industrial sectors, and lead the global green transition.
What will generative AI mean for markets and economies?
Generative artificial intelligence isn’t a new concept—the broad idea has been around since the 1960s, and the transformer architecture that makes it more effective was detailed in 2017. But the launch of ChatGPT has shown its potential impact when combined with a platform with strong consumer adoption. Currently, we see AI-related opportunities across a range of software, internet, and semiconductor stocks.
What’s the outlook for rates and yields?
We expect central banks to commence rate-cutting cycles in 2024. In our view, government bond markets are overpricing the risk that high interest rates will represent the new normal, and we expect yields to fall in 2024.
Are higher debt and higher rates the new normal?
Debt is likely to continue to rise, fixed income volatility is likely to be higher in the decade ahead, and we think it unlikely that rates and yields will return to pandemic-era lows. But we do not believe that rates or yields are now in a structural uptrend. Debt, demographic, and productivity trends, along with a gradual restoration of central bank credibility, mean we expect rates and yields to settle at lower levels than today’s.