Why we shouldn’t assume that populism has peaked

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With the benefit of hindsight, Brexit and the election of Trump are not surprising

  • Developed economies are polarised: the gains from globalisation have not been evenly shared
  • Financial crises hurt:  the Global Financial Crisis (GFC) has had a lasting impact on living standards
  • Failure to deliver: traditional politics and politicians have not done enough to counter some of the excesses of globalisation

We shouldn’t assume that populism as peaked

  • It’s far from obvious that those who voted for Brexit and Trump will get what they wanted
  • There’s no guarantee that those who have rejected the politicial establishment will come back into the fold
  • …but they could turn to more radical alternatives

There are profound economic and market implications

  • Bond investors: are you confident G10 sovereigns will not restructure or inflate away their debts?
  • Equity investors: are you confident that governments will not nationalise some industries, heavily regulate others, make frequent use of windfall taxes, etc.?

    Published on 7 April 2017

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