BCG Chief Economist: Artificial Intelligence Will Displace Labor | Philipp Carlsson-Szlezak on Economic False Alarms and Solar Flare Black Swans
Episode publishedPodcast: Forward GuidanceForward Guidance
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Jack: Forward guidance is brought to you by Van Eck, a global leader in asset management since 1955. You'll be hearing more about a Van Eck ETF later on. But for now, let's get into today's interview. Before we get started with today's episode, Block Works is hiring for our podcast, Lightspeed. We're looking for someone to cohost the show and interview the top builders within the Solana ecosystem.
If you're interested and think you'd be a good fit, check out the link in the description to apply. Alright. Let's get into today's episode. I am joined by Philip Carlson, global chief economist at the Boston Consulting Group and author of Shocks, Crises, and False Alarms, How to Assess True Macroeconomic Risk. Philip, great to meet you.
Welcome to Forward Guidance.
Philip: It's great to be with you. Thanks for having me.
Jack: Phil, we can talk about shocks and crises in a minute, but I first wanna ask you about the false alarms in the title. What were you referring to? Because there have been a lot of economic false alarms over the past 4 or 5 years, haven't there?
Philip: That's right. I mean, just when you think about, say, 2020 through the present day, I count at least 4 or 5 starting with the pandemic itself. When when that hit, you know, the common, received wisdom was this will be a protracted, really long recovery, more like 2008 and maybe as bad as the 19 thirties. Instead, we got a very swift, very tight recovery. Then you had the inflation spike, and the headlines veered into 19 seventies inflation meltdown.
That wasn't to be. We've gone from from 9 to 3% in less than a year or, basically, a year. We're not out of the woods, but, clearly, it's not an inflection point. It's not a structural break. Then when interest rates rose, the narrative was we gotta see a cascade of emerging market defaults, you know, sort of Asian financial crisis style, late nineties type, problems.
And that hasn't that hasn't come to pass either. And then, you know, the most obvious false alarm is the so called inevitable recession of 2023, which, you know, is nowhere to be seen, and I think it's just the latest in in the long series of of, narratives that just are too nervous, too loud, and then essentially false alarms.
Jack: And let's take that inevitable recession of 2023, which was widely forecasted in 2022. I thought it was likely I interviewed a lot of people who thought it was likely as well. I remember a Bloomberg, headline from Bloomberg Economics saying that there was a 99% chance of a recession. As you said, many people thought it was inevitable. How would you diagnose that false alarm?
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