How to Tell Where the Global Economy Is Headed

One way to deal with the current global economic uncertainty is to search for consistent and reliable indicators to help you navigate the chaos. Another way is to focus on some time-honored verities about savings and human capital. In an era of pandemic and financial crisis — which mobilized many Keynesian-style rescues — these old truths of economics are often forgotten.

First, countries that have high rates of saving will reap compound returns. If they can maintain those high saving rates, eventually they will come to own substantial parts of the world economy. Singapore and Norway are examples of this phenomenon, with some of Norway’s wealth coming from the good fortune of its oil.