What if the global economy’s luck runs out?

Trade tensions have eased and markets are steady, but politicians must make growth inclusive

This being December, my natural inclination is to review the past year's economic and financial developments to help policymakers and investors anticipate what might be coming in 2020. This year is ending on a relatively positive note, especially when compared with the same time last year. There is hope of a global growth pickup, trade tensions have lessened and central banks have reaffirmed they will maintain ultra-low interest rates and continue to provide ample liquidity. Financial volatility is subdued, and there are reasonable expectations of solid investor returns across many asset classes.

As tempting as it is to dwell on current financial and macroeconomic conditions, doing so risks obfuscating a key element in the outlook for the future. There is a curious contrast between the relative clarity of expectations for the near term and the murkiness and uncertainty that comes when one extends the horizon further - say, to the next five years.