The dangers of economic complacency

While politicians increasingly embrace protectionist policies, they are ignoring a much greater risk to their economies - and global economy in general. Stephen Roach explains why the global risk binge could end in a bad hangover.

A new level of complacency has set in. It's not just a financial-market thing - extremely tight spreads on risky assets and sharply reduced volatility in major equity and bond markets. It's also an outgrowth of the increasingly cavalier attitude of policy makers. That's true not only of central banks but also - and this is a major concern of mine - by the global authorities charged with managing the world financial architecture.

Meanwhile, by flirting with the perils of protectionism, politicians are ignoring some of the most painfully important lessons from history. After four fat years, convictions are deep that nothing can derail a Teflon-like global economy. That's the time to worry the most.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
MoneyWeek

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.