At Bloomberg View Mohammed El-Erian sees a pattern emerging in Donald Trump’s approach to the economy. The features he identifies are:
- t is targeting higher growth and greater job creation using what can be called an “import- substitution-plus†approach to policy making, together with elements of an industrial policy
- It operates both at the micro and macro levels
- It actively uses signals and narratives as economic policy tools
- It is underpinned by a carrot and stick philosophy
- When it comes to cross-border relationships, the administration isn’t shy about upending multidecade constants in U.S. economic policy making
He concludes:
If sustained, the impact of Trump’s approach would extend well beyond changes to the internal workings and orientations of the U.S. economy, including how it picks and chooses the way it interacts with the global economy. Given that the U.S. is at the core of the international monetary system, what happens here would not stay here. It would most likely trigger reactions from other countries while potentially also shaking the conventional functioning of a rule-based global system.
We’ll see. I’d bet that it will be a lot more transactional than that.
Ah, well. It’s the nature of human beings to attempt identify patterns even where none exist. Maybe there will actually be a pattern, maybe there won’t.
