China’s economic predicament. Inflation’s stabilising effect on debt. Armenia’s lonely plight. Fusion’s future – a big bet. Mental agility’s role in reducing anxiety.
QUOTE OF THE WEEK
ARTICLE OF THE WEEK
Michael Pettis, How China Trapped Itself
(Foreign Affairs, 5 October 2022)
One of the most astute economic analysts of China makes it clear why the economic model promoted by the Chinese Communist Party has left its leadership with only bad choices. In Pettis’ own words: “It can shift out of an economic growth model that has generated a great deal of wealth, albeit at the cost of escalating inequality, surging debt, and an increasing amount of wasted investment over the last decade. Or Beijing can choose to continue with its current economic model for a few more years until it is forced by these rising costs into an even more painful transition.” The key issue is investment: at 40 to 50% of GDP, it has to be considerably reduced, but with growth so dependent on it, this can’t happen without a sharp slowdown in overall economic activity (metered paywall that may require prior registration – reads in 8-10 min).
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Daniel Gros, The Stabilizing Effect of Inflation
(Project Syndicate, 6 October 2022)
The economist Daniel Gros makes an important point often overlooked by commentators. The combination of rising inflation and soaring government debt ratios leads many to conclude that a financial crisis is imminent. Not so fast, Gros argues: with many governments’ debts being inflated away and real interest rates still negative, this scenario remains unlikely. That said, as Gros himself acknowledges debt risks have not gone away, and there is no guarantee of smooth sailing ahead (metered paywall that may require prior registration – reads in 6-8 min).
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Daniel Barnes, Armenia’s lonely plight
(The Critic, 4 October 2022)
Despite the similarities between the conflict in Ukraine and the one in Armenia, the response of the West could not be more different (in the case of Armenia, a complete lack of international response). So why don’t we care about Armenia? This article explains. It boils down to Europe and the West being in bed with Azerbaijan because it needs its energy (metered paywall – reads in about 5 min).
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Dominic Bliss, Many scientists see fusion as the future of energy – and they’re betting big
(National Geographic, 4 October 2022)
A good primer for understanding what nuclear fusion is all about. Many scientists, backed by investors, place their hope in it: if harnessed on a commercial scale, fusion could produce so much energy from so little raw material that it would solve “all of humanity’s energy problems in one fell swoop – amongst many other things” (metered paywall – reads in about 10 min).
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Kira Newman, How to Get Comfortable With Uncertainty and Change
(Greater Good Magazine, 4 October 2022)
Most of us are uncomfortable with uncertainty, which the global environment is currently providing in abundance. To best way to cope with it lies in cultivating mental agility – “a nimbleness in how we think, feel, and act that will allow us to adapt to changing circumstances.” Research suggests that people who are more psychologically flexible have higher wellbeing and tend to be less anxious and worried, and this article provides a few science-based insights on how to cultivate mental agility (free access – reads in 6-8 min).
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