This book sets out what we see as the key issues facing asset owners in the macro environment, and shares the outlook for capital markets, strategic allocation and the future of the investment industry. It will also explore how the next ten years are likely to be very different from the 1980–2020 period.
Hello, this is Inigo Fraser Jenkins from AllianceBernstein. In this video, I wanted to discuss the key conclusions from our book A Preliminary Language for a Post-Global World. The book sets out a narrative that starts with the strategic investment outlook and then discusses what that means for capital markets. Finally, we show what changes are needed to strategic asset allocation and the way that people invest.
We make the case that investors face a new regime. This phrase is perhaps overused, but what we mean by it specifically is that the next 10 years for investors seem set to be very different from the period from 1980 to 2020.
The three mega forces of deglobalization, demographics and climate change seem set to act in concert to raise the equilibrium level of inflation and lower real growth. Deglobalization is unambiguously inflationary, as it fragments supply chains and labor markets. A shrinking working-age population, other things equal, reduces growth rates. Climate change increases the dispersion of possible growth outcomes. Moreover, the need to fund an energy transition implies a period of higher costs, at least until new generating capacity and grid infrastructure is installed.
The one force that potentially points in the opposite direction is artificial intelligence, or AI. We think it is not possible at this stage to quantify the potential for AI to raise productivity. Instead, we show that AI would have to generate a pickup in aggregate productivity of 1.5% per annum to offset the other downward forces on growth. Changes of that magnitude have happened before, but that is at the top end of the historical range.
You can now read the full whitepaper at the link below
