I am not a big fan of forecasting, especially when it comes to economic news as it is borderline impossible in many cases even for the most knowledgeable of experts (and I am far from an expert). Anyway, with that in mind, I will offer a list of questions for the new year instead of predictions:
- What will happen to the Eurozone? It is probably the biggest question on everyone’s mind heading into the new year. How will the Eurozone get out of the mess it is currently in? Will it get out or is this the year that major structural changes are forced (possibly with a breakup)? Finance ministers and the ECB across the Eurozone seem adamant that everything will be fine, but everything clearly is not. Reactions from the Fed and other central banks in response to whatever happens will also be very interesting. I expect for it to be another future-defining year in Europe. For better or for worse…
- Who will win the Republican nomination and will how much of a challenge will they pose to President Obama? It will be an intriguing (or is aggravating the word I’m looking for?) few months as the general election comes around and a lot of who is favored will likely depend on the economy. The more important question here though is will anyone actually look to solve the bigger issues with economic incentives in this country? Things like taxes, intellectual property rights, and even political incentives on Capitol Hill? I am not optimistic on that right now, as the only major one that has been discussed of those three is taxes and many of the proposals have been flatout backwards (i.e. saying a flat income tax is an equal tax on everyone).
- Will the strength of the populist movements continue in the United States and abroad? With the Tea Party and Occupy movements in the United States and plenty of activism around the world from Europe to the Arab Spring, the past few years have had quite a strong dose of populism and activism. Some for the better, others perhaps not. I do not know if the trend will continue in 2012 and for those seeking freedom from oppressive regimes, I hope it does, but as far as the United States goes, I really hope a more intellectual approach can be taken by activists. Anti-intellectualism has been rampant thus far and it is tremendously unfortunate. I won’t hold my breathe for that wish though. Addendum: By a more intellectual approach I did not mean that they did not protest, but that they would take a bit more time and care to learn the facts (or at least be open to other explanations) and in some cases even know what they were protesting for altogether.
- Will the Fed finally crack on NGDP targeting? The proposal has become quite the snowball and it looks like the momentum might keep going. Will Bernanke consider it? I am not so sure it would be the best idea. I do hope the discussion continues at full swing though as it is still worth considering. Also related, it will be interesting to see if recent Federal Reserve Board nominations Jerome Powell and Jeremy Stein have an impact on any changes in the direction of monetary policy.
Have anything that you think I should have mentioned? Or perhaps a comment (or prediction)? Share below.