How many times have you heard that China is on its way to surpassing the United States as the main driver of world economic growth? This week’ s guest says not so fast – growth dynamics are changing and the widely forecast new world order is returning to the old world order. Top rated economist, Nancy Lazar explains why the U.S. has resumed its role as the driver of global economic growth and China is lagging.
WEALTHTRACK Episode #1115; Originally Broadcast on October 03, 2014
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Founding Partner & Head of Economic Team , Cornerstone Macro
Are we witnessing a sea change in the global economy? How many times have you heard and have we reported that China is on its way to surpassing the United States as the main driver of world economic growth?
Until recently China’s rise seemed to be unavoidable and inexorable. It is the world’s most populous nation with an estimated 1.3 billion people, compared to about 320 million in the U.S. Its coveted middle class is bigger than our entire population. Although its economy has slowed to an estimated 7% plus growth this year, the U.S. economy, still recovering from a serious recession is expanding only at 3%, if that.
And in size, China’s economy is second only to the U.S. having surpassed Japan’s as number two in 2010.
But this week’s guest, Nancy Lazar says not so fast. Growth dynamics are changing and this widely forecast new world order is returning to the old world order, with the U.S. rising and China waning.
Lazar is a Founding Partner of macro research firm, Cornerstone Macro which she and her partners formed last year. Lazar heads up its Economic Research team.
Lazar has been ranked one of Wall Street’s top economists by Institutional Investor magazine for more than a decade, including being ranked number 2 for the past four years. She is second only to her former business partner, Ed Hyman with whom she founded independent research firm ISI group in 1991.
Lazar and her team believe that for the first time in more than 20 years the U.S. will be the driver of world economic growth.
They recently sent a chart to clients, which we will have on the program, showing that for the first time since 2006 nominal GDP in the U.S., that’s including inflation, may increase more than China’s nominal GDP next year, by over $170 billion.
I asked Lazar to tell us why the U.S. is resuming its role as the dominant economic world power and how long it will last.
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PAY ATTENTION TO THE BUSINESS CLIMATE OF WHERE COMPANIES DO BUSINESS
SOME QUALITIES JUDGED:
- Ease of starting a business
- Obtaining credit & construction permits
- Getting electricity
- Registering property
- Investor protections
- Contract enforcement
U.S. RANKED NUMBER 4, CHINA RANKED NUMBER 96
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LAZAR & TRAHAN: MACRO MATTERS
Even the most hard-core stock pickers on Wall Street watch out for big picture events that can move markets. But which macro events matter most? Fed “tapering”? The slowdown in China? The housing recovery? Two investment research stars will be exclusively on WEALTHTRACK this week: Nancy Lazar and François Trahan both left their previous firms to become founding partners in Cornerstone Macro, devoted solely to macro economics, policy and strategy. What they identify as the next emerging market will surprise you! WATCH NOW…
Nancy Lazar – Robert Shiller – Andrew Lo
Dealing with the new market realities. Two giants of behavioral finance- Yale Professor and Irrational Exuberance author, Robert Shiller and MIT professor and hedge fund manager Andrew Lo- discuss where the money will be made in the new financial landscape. Plus, top rated economist Nancy Lazar of ISI Group fills us in on the outlook for global economies and markets.
Additional appearances of Nancy Lazar from the WEALTHTRACK Archives:
Setting up a brand new, world class macro research firm is a daunting task under any circumstances, but leading economist Nancy Lazar was amazed at how much easier it was establishing Cornerstone Macro than it had been in 1991 when she and former partner Ed Hyman established ISI Group. The difference? Technology!