Barclays Research released the Equity Gilt Study 2020 (EGS). The 65th edition of this flagship Barclays report delves into the long-term changes wrought by the COVID-19 pandemic and the extraordinary shocks it has delivered in both developed and emerging markets.
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Jeff Meli, Global Head of Research at Barclays said:
“In this year’s Equity Gilt Study we analyze how the unparalleled disruption caused by COVID-19 stands to transform the macro landscape. We look at how the pandemic is reversing several decade-long trends, from globalization to international mobility; accelerating others, such as self-reliance and sustainability; and exacerbating issues, from debt management in developed countries, to structural vulnerabilities in emerging markets.”
Across five in-depth chapters, Barclays analysts focus on what the post-pandemic world will look like, including:
- ‘The post-COVID economy’ which analyses how the unprecedented disruption caused by COVID-19 is likely to lead to long-term shifts in consumer behaviour, corporate decision-making and government policy. This chapter considers how, as de-globalisation trends accelerate, cost-efficiency and frictionless movement of goods and people could give way to safety, self-reliance and sustainability.
- ‘DM debt: Pulling all the levers’ evaluates the debt management consequences that the West will grapple with in the aftermath of the policy measures that governments took to cushion the COVID-19 shock. Policy choices in the years ahead range from overt debt reduction policies, such as austerity and taxation, to covert ones, such as financial repression and inflation.
- ‘Diminishing defenses in Emerging Markets’ considers the economic and social challenges facing EM from the COVID-19 shock, and the long-term effects on EM assets and risk. The pandemic should exacerbate existing EM structural vulnerabilities, and create new ones. This will cause EM economies to suffer disproportionately from accelerated de-globalisation and reduced international mobility, even after the near-term shock from the pandemic has faded.
- ‘Reinvigorating US labor force participation’ explains why a labor force participation rate (LFPR) rebound is needed for the US to have a chance at returning to its pre-COVID “goldilocks” economy of low inflation and full employment.
- ‘Managing uncertainty’ considers why uncertainty is different from other types of risk and how it effects markets. It also offers a five-step plan for managing market uncertainty.
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