The current global economic upswing is unlike any other before it because of the impact of technology, politics and regulations, according to ANZ Chief Economist Richard Yetsenga.
Yetsenga, who is speaking about influences on the current economic cycle at the CCI-ANZ Economic Breakfast on March 27, says the global economy has recovered with Australia and now WA participating.
However, wage growth and business investment remain subpar and there are several influences at work.
“The US yield curve has already flattened and household saving rates are low,” Yetsenga says.
“Credit growth has been constrained by more appropriate regulatory architecture, while unsettling politics persist and technology reshapes work and play.”
Technology is especially disruptive because it’s finding efficiencies in the economy that require little investment.
“Even if you think about simple things like Uber. What Uber’s done is take existing capacity,” he says.
“In advanced economies cars spend about 95 per cent of their time stationary so it’s taken that capacity and has brought it into the market economy.
“It’s a new entrant which is deflationary but it hasn’t taken any investment to really do that.”
Yetsenga says disruption from technology is radically different to the impact China’s boom had to the global economy.
“China reshaped the global economy and technology probably will too, but the impacts will be radically different,” he says.
“One of the impacts is there’s fewer positive offsets. China kind of killed global manufacturing but anyone with a resource base boomed, whereas technology looks like it’s going to be more disruptive across the board.”
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