Perspectives Blog

Labor markets in the new digital age

Columbia Management, Investment Team | April 14, 2014

The downside to technological progress is short-term dislocations and job loss for those displaced by automation. Workers with high skills and advanced education command a wage premium while unskilled and lower-skilled workers are displaced which aggravates income inequality. The winners will be those who have skills complementary to the new emerging technologies and those who discern how best to adapt and gain competitive advantage. By Marie

Income inequality, disinflation and profit growth – the role of globalization

March 10, 2014

Income inequality has tended to rise in both developed and EM. Companies look across the globe to determine where they can manufacture their products at the lowest risk-adjusted cost. We believe that the global unit labor cost arbitrage is likely to continue for many decades. By Marie Schofield, Chief Economist and Toby Nangle, Head of Multi Asset Allocation Last week we discussed rising income inequality in developed markets and the degree to…

The role of income inequality

March 3, 2014

The rise in income inequality was a root cause of the U.S. financial crisis and the slow post-recovery period. Mediocre income gains for middle income households have contributed to the slow recovery of U.S. consumption and economic growth. As pressure continues to build to address income inequality, we expect the government to lead on this issue and private sector to lag. By Marie Schofield, Chief Economist and Toby Nangle, Head of Multi asse…

Slow growth: Why is it here and will it stay?

February 24, 2014

There is no consensus on the root causes of slow growth. As economists seek explanations, the secular stagnation theory has re-emerged. Strong evidence suggests the neutral real rate has fallen. (But is it negative? We explore this question in this continuing series over the next few weeks.) By Marie Schofield, Chief Economist and Toby Nangle, Head of Multi Asset Allocation The idea that economies may be undergoing a long period of slow growth…

Special report – 2014 mid-year review and outlook

Columbia Management, Investment Team | June 16, 2014

…orly managed state and local borrowers, as a buying opportunity, as we believe the vast majority of municipal issuers are experiencing credit strengthening with improving tax collections and still restrained spending. Economy Marie M. Schofield, Chief economist and senior portfolio manager Review: The discouraging drop in first quarter gross domestic product is a reminder that some headwinds persist despite the improvement in underlying economic…

Is a stock market correction coming?

Jeffrey Knight, CFA, Global Head of Investment Solutions and Asset Allocation | December 16, 2013

…ansion of the U.S. economy, which also argues for ongoing equity market strength. What might bring a correction? 1) Recession. Interestingly, in the absence of recession, the stock market tends to perform fairly well. Neither Marie Schofield (our chief economist) nor Zach Pandl (our chief interest rate strategist) assigns a material probability to recession in the United States next year. 2) Financial accident. Of course, you can never know for s…