In January 2020, the World Economic Forum published “Taking the Pulse of the New Economy”, the outcome of consultations with leading Chief Economists from both the public and the private sector, which aims to summarize the emerging characteristics of the current economic environment and identify the priorities for focus and action by policy-makers and business leaders.
Due to the increased polarization of economic outcomes and the social tensions deriving from it, traditional policy mechanisms, such as the monetary policy tools, have become less reliable than in the past. The contemporary challenge is to enable the transition towards a new economy, conjugating the digital and green transformations, and the adaptation towards equitable social outcomes. However, the economy in 2020 will have to face several obstacles, for instance extreme weather events, imposition of new trade barriers, stagnating convergence of per capita incomes and the drawbacks of the digital revolution.
According to the Chief Economists Survey, “growing income inequality” is perceived as the most probable event to shape the global economy in 2020, evaluated almost 6 on a scale from 1 to 7.
Yet there are signs of policy agility and business reform covering six main areas of activity:
- Fairer corporate tax structures
- Macro-prudential frameworks
- Softening trade tensions
- Innovation and industrial policy
- Environmental and social issues
- Investments on human capital.
Even so, this momentum needs strengthening; policy makers and business leaders must draw their attention on rethinking fiscal and competition policies as well as implementing a fair green and digital transition.
Find out more by reading the whole paper available at this page.