The Relationship Between Politics and the Economy

Politics and Economics are always connected. It’s wrong for economists to treat the political as something outside the realm of economics. Many ask the question; how does the political volatility affect the global economy?

Economics and demographics drive politics, not the other way around. Political outcomes like elections, can have an effect on the economy in the short run. The political outcome that we receive worldwide are being driven by what’s happening economically and demographically. We are living in a world where growth appears to be stalled out. This is giving people the sense that maybe globalization can’t deliver. But not all believe this is true. They believe that we are living in a transition where different economies in the world transitions. We are also living in a world where the presence of the “Super dollar” has disrupted global trading patterns. This big increase in the US Dollar has been highly disruptive to global trading patterns. Another demographic factor that is driving politics worldwide is the emergence of millennial as a force in the economy at exactly the same time when the economic power of  baby boomers is beginning to subside. This explains that we are living in this world where we have a lot of population that is very young who are being balanced a population that tends to be over 55 who are living in the most conservative years of their lives. Where their concerns are different than those millennials who are living liberally. So we are living in a world where are demographics are giving us this sense that we are extremely divided and demographically, we are.