5 insightful op-eds or articles to help make sense of today’s world
(Project Syndicate - 19 June 2018)
This is an article that will fuel the concerns of all those who fear that the next crisis will come from high-yield corporate bonds. Since the beginning of the global financial crisis ten years ago, the value of nonfinancial companies' outstanding bonds has nearly tripled, as the result not least of growth in corporate debt in emerging markets. A correction seems likely as defaults rise, but as the McKinsey consultant shows, the broad shift toward bond financing might actually be a welcome development (reads in 6-7 min, with lots of charts).
(Bloomberg - 17 June 2018)
This is an important contribution to the debate about the policy efficacy of democracies versus autocracies. Contrary to popular misconception, says the MIT economist, authoritarian regimes rarely get the job done. His most recent research shows that democracy is good for economic growth. Countries that democratize from a nondemocratic regime such as a military dictatorship, monarchy or autocracy grow more rapidly in the next 20 years or so, and end up with 20 percent higher income per capita (reads in 7-9 min).
(Foreign Affairs (metered paywall) - 1 July 2018)
This is a must-read to understand what’s going on around the world. The human instinct to identify with a group is almost certainly hard-wired, with numerous neurological studies confirming that group identity can even produce physical sensations of satisfaction. Yet, the Yale professor argues that policy-makers underestimate (at their peril) the role that group identification plays in shaping human behavior. They also overlook the fact that the identities that matter most are not national but ethnic, regional, religious, sectarian, or clan-based (reads in 10-12 min).
(The New York Times - paywall - 17 June 2018)
Everybody is blaming everybody for a drought in an important Himalayan resort. This article exposes the many immediate and unintended consequences that stem from an unexpected water crisis – the decision to ask tourists (the mainstay of the economy) not to come being the most prominent one. As climate gets warmer and water scarcer, such crises will multiply around the world. Some regions and countries will be hit particularly hard (reads in 7-9 min).
(Quartz - 19 June 2018)
In short: the more connected we become, the greater the need to learn the art of solitude. Blaise Pascal (the French philosopher and mathematician) had it right four centuries ago: “All of humanity’s problems stem from man’s inability to sit quietly in a room alone.” If we are connected to everything and everyone, except ourselves, we are bound to be in trouble. A bit of solitude and the ability to face nothingness is part of the solution (reads in 6-8 min).