After an extraordinary year in 2016, many await with a mixture of curiosity and perhaps some trepidation to see what this new year will bring. As a practitioner of the dark arts of economics, I can pare my list of uncertainties to four key areas: economic policy under a Trump presidency and outlook for the U.S. economy; the related question of prospects for U.S. interest rates and the dollar; developments in the Chinese economy, capital outflows and the renminbi before the crucial 19th Communist Party congress in late 2017; and the extent to which politics in Europe pull the EU toward disintegration. Before examining these issues there is also a bigger picture to explore, about the context in which they will evolve.
It will not have escaped notice that 2017 marks the centenary of the Russian Revolution, but this is of more than academic interest. It is also the centenary of the entry of both the U.S. and China into World War I. For Russia, the U.S. and China, the war proved to be politically decisive for the very different paths they chose during the 20th century. In some ways, we could argue today that they have come full circle.