The three gluts

WRITING about macroeconomics has always been my passion. When thinking and writing about the global macro outlook, I find a three-part framework helps me organise my ideas - and today, those ideas centre on three critical "gluts" in the global economy.

For starters, let me explain my framework: First, I strive to simplify macro matters as much as possible, even at the risk of the occasional oversimplification. Simple is beautiful. I believe my bias for simplification goes back to what I learned decades ago in my econometrics classes: One should always aim for a parsimonious model - the simplest plausible model with the fewest number of explanatory variables.

Second, global trumps local when it comes to explaining important macro trends. The globalisation of trade, capital, people, ideas and information flows means that global factors are now so much more important in driving local economies and markets than in the old days of limited mobility.