This paper examines old and new evidence on the predictive performance of asset prices for inflation and real output growth. We first review the large literature on this topic, focusing on the past dozen years. We then undertake an empirical analysis of quarterly data on up to 38 candidate...

We study the effects of changes in uncertainty about future fiscal policy on aggregate economic activity. Fiscal deficits and public debt have risen sharply in the wake of the financial crisis. While these developments make fiscal consolidation inevitable, there is considerable uncertainty about...

We show that bond risk-premia rise with uncertainty about expected inflation and fall with uncertainty about expected growth; the magnitude of return predictability using these two uncertainty measures is similar to that by multiple yields. Motivated by this evidence, we develop and estimate a...

This paper presents a stylized model of international trade and asset price bubbles. Its central insight is that bubbles tend to appear and expand in countries where productivity is low relative to the rest of the world. These bubbles absorb local savings, eliminating inefficient investments and...

This paper addresses three issues related to the relative rates of growth in the United States, the European Union, and China during the four decades between 2000 and 2040. The first concerns the source of the factors which make it likely that China will continue to grow at a high rate for...

While the economies of the fifteen countries that were in the European Union (EU15) in 2000 will continue to grow from now until 2040, they will not be able to match the surges in growth that will occur in South and East Asia. In 2040, the Chinese economy will reach $123 trillion, or nearly...

The share of the population aged 60 and over is projected to increase in nearly every country in the world during 2005-2050. Population ageing will tend to lower both labor-force participation and savings rates, thereby raising concerns about a future slowing of economic growth. Our calculations...

This paper provides estimates of the economic impact of non-communicable diseases (NCDs) in China and India for the period 2012-2030. Our estimates are derived using WHO's EPIC model of economic growth, which focuses on the negative effects of NCDs on labor supply and capital accumulation. We...

Following on Keynes's Economic Possibilities for Our Grandchildren, this paper develops conjectures about the world we will leave to our grandchildren. It starts by outlining the 10 most important trends that have defined our economic, social, and political lives over the last 100 years. It then...