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Jim O'Neill

Jim O'Neill



Articles by Jim O'Neill

The Bitcoin Lottery

March 8, 2021

The sudden rise of "special purpose acquisitions companies" and cryptocurrencies speaks less to the virtues of these vehicles than to the excesses of the current bull market. In the long term, these assets will mostly fall into the same category as speculative "growth stocks" today.

LONDON – I was recently approached about setting up my own “special purpose acquisition company” (SPAC), which would allow me to secure financial commitments from investors on the expectation that I will eventually acquire some promising business that would prefer to avoid an initial public offering. In picturing myself in this new role, I mused that I could be doubly fashionable by also jumping into the burgeoning field of cryptocurrencies. There

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Reflections on a Plague Year

February 10, 2021

It may be too soon to draw firm conclusions about which pandemic-induced changes are likely to prove long-lasting. But some of the most significant could include enhanced vaccine development, increased government spending, accelerated digitalization, and the continued rise of China.

LONDON – It is probably premature to offer an assessment of the COVID-19 pandemic’s possible consequences, not least because there may well be many more twists and turns to come. And once we defeat the coronavirus, some of the pandemic-induced changes to our lives might turn out to have been temporary. But with these caveats in mind, it is possible to begin drawing some conclusions.

Reimagining the Platform Economy

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The BRICs at 20

January 13, 2021

Much has happened in the two decades since the BRICs (Brazil, Russia, India, and China) became a group to watch in the twenty-first century. While some of them have surpassed expectations, others have fallen short, as have the relevant global-governance institutions.

LONDON – This November will mark the 20th anniversary of the BRIC acronym that I coined to capture the economic potential of Brazil, Russia, India, and China. Many commentators will be revisiting the concept and assessing each country’s performance since 2001, so here are my own thoughts on the matter.

Whither America?

Alex Wong/Getty Images

The Danger of

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Bull or Bear in 2021?

December 14, 2020

Though the COVID-19 pandemic continues to disrupt social and economic life around the world, it has yet to take the wind out of equity markets’ sails. And with developed countries’ monetary and fiscal policies remaining generous, and vaccines on the way, there is good reason to suspect the bulls to keep charging in the new year.

LONDON – In two of my previous commentaries on the peculiar world of equity markets in 2020, I offered a bullish outlook for how events would unfold as the year progressed (with all due caveats for the market’s overall unpredictability). In the event, things have broadly played out as I anticipated, owing to a remarkable monetary- and fiscal-policy expansion and the timely arrival of vaccines that appear

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A No-Brainer for the G20

November 16, 2020

The sooner we get the COVID-19 pandemic under control, the sooner we can put the global economy back on track. At a virtual gathering this month, the G20 will have an opportunity to do precisely that, provided that world leaders are able to see the economic windfall that is staring them in the face.

LONDON – We may soon witness the bargain of the century. G20 leaders, representing the world’s largest economies, will discuss COVID-19 this month at a virtual summit, where they will have a chance to secure a return on investment that would make even the legendary investor Warren Buffett blush.

Why Biden Can Overcome Political Gridlock

Alex Wong/Getty Images

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The Logic of Sino-Western Détente

October 12, 2020

It might be cathartic to opine noisily about another country’s standards and practices, but there is substantial historical evidence to suggest that a country’s citizens will tend to value economic opportunity over most other issues. That axiom applies as much to the US, the UK, and Europe as it does to China.

LONDON – While much of the hand wringing over China has abated somewhat during the COVID-19 crisis, the fears animating Western attitudes toward that country have not disappeared, and could resurface at any moment. These tensions represent a major, vexing dilemma for the world, given China’s massive and growing economic power. And the situation certainly hasn’t been helped by the failure of the other major

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The V-Shaped Recovery Marches On

September 10, 2020

Despite all of the doom and gloom of the past six months, much of the global economy continues to show signs of a sharp recovery from the pandemic-induced collapse this spring. And while nothing is guaranteed, a number of favorable structural factors make a further acceleration highly likely.

LONDON – Large swaths of the global economy are exhibiting traditional signs of a V-shaped recovery from the pandemic-induced collapse this spring. The monthly indicators for many countries show vigorous rebounds in June and July, with 10-15% projected growth in real (inflation-adjusted) GDP in the third quarter, all else being equal.

The Post-Pandemic Economy’s Barriers to Growth

PS

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South Korea on Top Again

August 18, 2020

The latest economic and public-health indicators show that South Korea is far ahead of most others in managing the COVID-19 pandemic and staging a robust economic recovery. The country’s success is no accident, and it is time for others to start following its example.

LONDON – On August 11, the OECD signaled that it would be revising its 2020 real (inflation-adjusted) GDP forecast for South Korea from -1.2% to -0.8%, adding to the confidence that the country is faring better economically than any other OECD member. On average, the group’s 37 member states are projected to experience a real GDP contraction of 7.6%. Worse, this news came just a day before the United Kingdom’s government reported a record-breaking

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Are Financial Markets None the Wiser?

August 6, 2020

Obviously, a disaster scenario in which COVID-19 vaccine trials fail and the pandemic spins out of control would expose the ongoing equity rally as a case of irrational exuberance. But the worst-case scenario isn’t necessarily the most likely, and the bears have not adequately considered the possibility of permanent positive changes.

LONDON – In an April commentary about the wild gyrations in financial markets during the February-March phase of the COVID-19 pandemic, I noted that the behavior of equity markets had been as bewildering, complex, and fascinating as ever. Still, I suspected that a weird logic was at work, and argued that markets might continue to rally despite the collapse of the world economy. And so

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Has Big Pharma Finally Stepped Up?

July 17, 2020

With the launch of a fund to support new treatments against novel and resistant pathogens, the pharmaceutical industry has acknowledged that there is a looming antimicrobial resistance crisis. But without better incentives, especially for smaller firms, additional up-front funding won’t solve the problem.

LONDON – Earlier this month, the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) launched a nearly $1 billion AMR (antimicrobial resistance) Action Fund to support the development of desperately needed new antibiotics. Many of the world’s largest pharmaceutical companies, as well as the Wellcome Trust and the European Investment Bank, have signed on to the initiative, which was

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A V-Shaped Recovery Could Still Happen

July 7, 2020

Given the sheer scale and unprecedented nature of the COVID-19 economic shock, it is not surprising that most commentators believe the outlook for recovery is bleak. But key weekly and monthly indicators suggest that a sharp return to growth remains more likely than not.

LONDON – Since March, I have been more open than other commentators to the possibility of a “V-shaped” recovery from the pandemic-induced downturn (though I have also consistently warned of structural challenges facing many economies in the decade ahead). Wherever I have expressed this optimism, I have met with pushback, given the apparent depth and scale of the current crisis. And yet, as we move into July, many classic short-term leading and

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Explaining the Pandemic Performance Differential

June 8, 2020

Although a country’s success in managing the COVID-19 crisis depends on many variables, there is a striking correlation between today’s performance and past economic-development rankings. Countries that have consistently achieved broadly shared dynamic growth have proved far more capable of containing the first wave of the pandemic.

LONDON – I recently re-read and reflected on everything I have written for Project Syndicate since the start of this year. Two commentaries, in particular, stood out. In January, I suggested that without a new surge in productivity, the world would struggle to achieve the same level of economic growth in the 2020s as it did in previous decades.

Rage Against the

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It’s Time to Target Nominal GDP

May 5, 2020

After years of persistently low inflation, tepid growth, and rising inequality, central banks can no longer justify a monetary-policy regime that targets price stability. To strengthen the post-pandemic recovery, they must shift gears, by adopting a policy objective that actually has some bearing on the real economy.

LONDON – Ever since Western central banks started targeting inflation in the early 1990s, some economic analysts – not least Samuel Brittan of the Financial Times – have been pointing out that it would be better to target nominal GDP. As the numerical value of all output or expenditure in an economy, nominal GDP combines a country’s real economic output with its associated prices or costs.

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How to Use the SDR

April 28, 2020

With governments in need of new options to shore up national economies during the COVID-19 lockdown, an older but potentially more powerful mechanism is already available. If deployed in the right way, the IMF’s international reserve asset could mobilize substantial capital at effectively no cost.

LONDON – Owing to the COVID-19 pandemic, the International Monetary Fund estimates that, between now and the end of 2021, global GDP will suffer a cumulative loss of more than $9 trillion – a figure greater than the size of the Japanese and German economies combined. While the ultimate solution to the crisis will depend on the development and widespread deployment of diagnostics, treatments, and eventually a vaccine, there

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Blaming China Is a Dangerous Distraction

April 14, 2020

Nobody denies that Chinese officials’ initial effort to cover up the coronavirus outbreak in Wuhan at the turn of the year was an appallingly misguided decision. But anyone who is still focusing on China’s failings instead of working toward a solution is essentially making the same mistake.

LONDON – As the COVID-19 crisis roars on, so have debates about China’s role in it. Based on what is known, it is clear that some Chinese officials made a major error in late December and early January, when they tried to prevent disclosures of the coronavirus outbreak in Wuhan, even silencing health-care workers who tried to sound the alarm. China’s leaders will have to live with these mistakes, even if they succeed in resolving

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The G20’s Pandemic Moment

March 24, 2020

Just as a meager investment to address antimicrobial resistance could yield a 2,000% return in the future, so, too, would an immediate modest outlay to finance development of COVID-19 therapeutics. As world leaders gather to formulate a response to the crisis, they must not lose sight of this simple cost-benefit calculus.

LONDON – This week, G20 leaders will convene virtually to discuss the COVID-19 crisis. One hopes that the emergency summit marks the beginning of a thoughtful collective response to this grave challenge. If so, the meeting may turn out to be even more consequential than the London summit hosted by British Prime Minister Gordon Brown in April 2009, which created the framework for a coordinated

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A Stress Test for Public Health Systems

March 9, 2020

Now that the coronavirus has gone global, markets are swooning and the weaknesses of national health systems are being revealed. Like the slower-moving crisis of antimicrobial resistance, the pandemic should alert governments to the need for significantly greater investment in public-health preparedness.

LONDON – On January 25, Chatham House and Georgetown University hosted US Secretary of the Treasury Steven Mnuchin for a discussion about US economic policymaking and the world. Mnuchin had come straight from the World Economic Forum’s annual meeting in Davos, but the dominant theme of that gathering (“stakeholder capitalism”) had already been eclipsed by broader developments. The coronavirus (COVID-19) outbreak had become a

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All Eyes on South Korea

February 20, 2020

Now that the South Korean blockbuster Parasite has taken home the Oscar for Best Picture, many around the world are eagerly searching for more examples of South Korean coolness. They should look to the South Korean economy, which offers valuable lessons for achieving sustainable, inclusive growth.

LONDON – South Korea is all the rage these days. Earlier this month, Parasite, from the South Korean filmmaker Bong Joon-ho, won Best Picture at the Academy Awards. Having read the reviews and seen the film a few days earlier, I was not surprised. Still, for the uninitiated, it is worth noting that this was the first time that a foreign-language film took home the top Oscar. Now, many around the world are eagerly searching for more

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Has the World Economy Reached Peak Growth?

January 16, 2020

Whether or not the 2010s were a "lost decade," one thing is clear: many countries fell short of their potential, possibly squandering their last best shot of registering strong GDP growth. In the decade ahead, demographic realities will catch up to China and the West, and the world will need a productivity miracle to offset the effects.

LONDON – At the start of a new decade, many commentators are understandably focused on the health of the global economy. GDP growth this decade most likely will be lower than during the teens, barring a notable improvement in productivity in the West and China, or a sustained acceleration in India and the largest African economies.
Financial Markets’ Iran Delusion

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Where Is the AMR Rebellion?

December 10, 2019

With extreme weather events becoming more frequent and young climate activists keeping the pressure on governments, policymakers and business leaders have finally begun to focus on the threat of climate change. The growing threat to human wellbeing posed by antimicrobial resistance merits a similar level of attention.

LONDON – The threat of antimicrobial resistance (AMR) is being overshadowed by the menace of climate change. Though the AMR problem is arguably equal in importance, it has not commanded nearly the same level of public awareness.
Is Growth Passé?

Kanok Sulaiman/Getty Images

Democratic

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A Living Wage for Capitalism

November 14, 2019

Higher nominal wages for low-paid workers can boost real earnings, increase consumer spending, and help make housing more affordable. And insofar as raising the minimum would increase companies’ wage bill, it would create a stronger incentive to replace labor with capital, which could lay the foundation for renewed productivity growth.

LONDON – At 3.6%, unemployment in the United States remains near its lowest level since the late 1960s. There are even signs that people who had previously dropped out of the labor force are being attracted back into it as employers scour a tight labor market for the marginal employee. Consistent with this news, US Federal Reserve Chair Jay Powell has pointed out that wage gains are

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Is Finance Ready to Go Green?

October 7, 2019

The financial industry plays an indispensable role in the modern economy by allocating society’s savings to borrowers engaged in productive pursuits. It could also play a crucial role in facilitating the investments needed to combat climate change, but only after it is restructured for that purpose.

LONDON – Since the 2008 financial crisis, the question of how to guide activity in the sector has featured prominently in public discourse, particularly in debates about building a sustainable future. In its most basic form, finance is a means of arbitrage between savers and borrowers: its purpose is to direct society’s savings toward productive ends. For those who provide financing, the goal is to support projects that

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The Issue Behind Our Issues

October 2, 2019

Many commentators nowadays rely on a narrative in which weak productivity growth, populism, and a rising China are threatening the very survival of Western liberal democracy. Yet most of the commonly identified causes of Western discontent are in fact symptoms of a deeper intellectual breakdown.

LONDON – As the chair of the Royal Institute of International Affairs (Chatham House), I recently hosted an offsite event with some of the organization’s strongest supporters, research staff, and other leaders. I left with a clearer view of three of the biggest issues of our time: slowing productivity growth, anti-establishment politics, and the rise of China.
The Impeachment Trap

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The Return of Fiscal Policy

September 18, 2019

With interest rates at record lows and global growth set to continue decelerating, there has rarely been a better time for governments to invest in infrastructure and other sources of long-term productivity growth. The only question is whether policymakers in Germany and elsewhere will seize the opportunity now staring them in the face.

LONDON – As we enter the last quarter of 2019 (and of the decade), cyclical indicators point to a slowing world economy amid wide-ranging structural challenges. There are plenty of issues to keep one up at night, be it climate change, antimicrobial resistance (AMR), societal aging, strained pension and health systems, massive debt levels, and an ongoing trade war.

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Trump’s One-Way Economy

August 13, 2019

If these were normal times, recent global developments would be showing up as sharply rising risk premia. But with monetary policymakers trying to sustain the current growth cycle in the face of disruptions from an incompetent US administration, these are anything but normal times.

LONDON – Nowadays, when people ask me how I am, I answer, jokingly, that I’m doing great, so long as I ignore Donald Trump’s presidency in the United States, Brexit, the crisis of the United Kingdom’s major political parties, and the performance of Manchester United.
The Case for a Guaranteed Job

PS OnPoint

Getty Images

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Does the G20 Still Matter?

July 10, 2019

The first few gatherings of the G20, at the height of the global financial crisis, yielded concrete results, and seemed to promise an auspicious future for global governance. But in the years since, the group has increasingly replaced action with empty talk, piling ever more goals on top of the unmet objectives of summits past.

LONDON – When the G20 leaders held their first summit in late 2008, many welcomed what looked like a diverse, highly representative new forum for crafting common solutions to global problems. The group acquitted itself well in responding to the global financial crisis, and, for a while, its emergence as a forum for international policy coordination seemed like one of the only

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Economic Lessons From Everest

June 18, 2019

Recent images of long lines at the Mount Everest base camp, and at choke points on the way to the summit, offer a perfect real-world example of mismanaged supply and demand. As in a number of other economic-policy areas, a combination of price adjustments and regulation offers the only way off the mountain.

LONDON – Like many others, I was shocked by recent images showing the size of the queue that formed in May to scale Mount Everest, the world’s highest peak, from the Nepalese side. The idea that delays caused by overcrowding may be partly to blame for some of the 11 reported deaths on the mountain during this year’s climbing season is horrific to consider.
Why Universal

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Putting Growth in its Place

May 10, 2019

Despite the political turmoil engulfing the United Kingdom, there is growing evidence to suggest that the "northern powerhouse" model of regional development outside of London is working. If the government fulfills its recent commitment to support a new Northern Powerhouse Rail project, current progress could gain even more momentum.

LONDON – After leaving Goldman Sachs in May 2013, I had the privilege of chairing an independent City Growth Commission to study the geographical imbalances of the British economy. Our task was to determine why London and the southeast had become so dominant, and how the economic performance of other major urban centers might be improved.
The

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The Future of Economic Growth

April 11, 2019

Given the failures to foresee the 2008 financial crisis and subsequent weak recovery, it is easy to think that economists have little to offer in the way of predictions. But when it comes to national-level GDP growth, past projections have largely been borne out; even when wrong, they can be used to diagnose structural problems.

MANCHESTER – Last month, I wrote about the growing divide between economic theory and real-world economic conditions, and reminded readers that economics is still a social science, despite whatever loftier ambitions its practitioners may have. Nonetheless, when it comes to the specific question of what drives economic growth in the long term, one can still offer rigorous predictions by

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Can Economics Shake Its Shibboleths?

March 14, 2019

Since the 2008 financial crisis, economic orthodoxies have been collapsing left and right. Under conditions of low unemployment, elusive inflation, weak productivity growth, and high profitability, economists in advanced economies may need to go back to the drawing board.

LONDON – Though economics aspires to the rigor of the natural sciences, at the end of the day it is still a social science. At no point in the past 40 years has this been more evident than it is now.

Jose Luis Pelaez Inc/Getty Images

Wojtek Radwanski/AFP/Getty Images

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For decades, conventional macroeconomic analysis has rested on the edifice of the

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