Remember how English singer-songwriter Jessie J howled and crooned that “it’s all about the money” at the 2012 Olympics closing ceremony? Her song, Price Tag, magically became the number one song, the Song of the Summer.
The Song of the Summer is a fuzzy title, an award bestowed on a song simply for the fact that it dominates an entire season. It is as sticky as a Popsicle under the sun. It will assault commuters’ ears every time an Uber driver connects a phone to her car’s sound system. Turn on the radio, and there it is. Walk into a mall, and it will play. It is inescapable. Not that you want to escape it, not really. Well, maybe not until September.
You can only hope that our latest Economic Outlook report, the Price of Growth, will be remembered for a bit longer. As for popularity, well, this is where the need to be humble should kick in.
In any case, ws we enter the Olympics season once more, this time in Rio de Janeiro, Brazil, we thought we would search for the Song of Summer 2016, with a touch of economics.
Oops, [we] did it again (Britney S. style).
We sang our way through the economic forecasting exercise. We did deserve some gratuitous joy since the first half of the year was daunting. Mini or medium crises – some of them still in the making – rattled almost every part of the world and global growth disappointed massively (see chart at the end of this post).
Why should Price Tag be the theme music of this outlook? Because a price (tag) is exactly what the global economy is missing. Priceless growth affects decisions, incentives and expectations around the world. So, to honor another summer of cheap growth, here is our playlist of another kind:
#1 David Bowie & Queen Under pressure because prices and turnovers are under pressure in today’s economy.
#2 Nancy Sinatra These boo(s)ts are made for walkin' because low prices continue to fuel consumption in Europe and the US.
#3 Beach Boys Good Vibrations because low interest rates (and cheaper building materials) are eventually driving a recovery of the construction sector in Europe and the US.
#4 Dire Straits Money for Nothing because negative interest rates became the norm in a growing number of countries thanks to accommodative Central Banks.
#5 Guns'n'Roses Knocking on Heaven's Door because USD12trn of bonds are placed with negative yields.
#6 Sniff in the Tears Driver's Seat because China and the Fed are driving world commodity prices and world interest rates.
#7 I Monster The Backseat of My Car because most Emerging Markets are price takers.
#8 50 Cent Get Rich or Die Trying because commodity exporters got richer over the past few years and are now suffering important output and wealth losses (and risking policy mistakes).
#9 Rod Stewart Da Ya Think I'm Sexy because Emerging Markets which rebalanced their economy earlier than others are experiencing capital inflows.
#10 Antares Ride on a Meteorite because corporate debt is strong and worrying in some countries, particularly China.
Playahitty’s The Summer is Magic was in everybody’s Walkman back in 1994. This song never gets old. Let’s hope the summer washes away some of the concerns weighing on global growth. In the meantime, enjoy your holidays!