Economy quotes of 2017 that you may revisit in 2018

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At the dawn of the new year, the cheerful bell overpowers all noise of the past year. However, after the resounding wave ebbs, we more than often find that some voices from the past are too strong to be drowned in the bells of December 31.

Echoing in our minds, they remind us of the events of the impact that will not be easily worn thin by the power of time.

The wisdom, ambition or sentiments manifesting at the time when they were being uttered, will also accompany us until the day that the rationale behind them is fulfilled.

"You all just got a lot richer" – Donald Trump, president of the United States

US President Donald Trump speaks during a signing ceremony for the Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017, on June 23, 2017, in the East Room of the White House in Washington, DC. /VCG Photo

The line was first broken out by the CBS News as being said by the US President Donald Trump on December 22 after signing into law his controversial tax reform bill, on which he had bet a fair amount of his political capital to secure a victory.

What raises doubts over the quotation being benign universally is the occasion on which it was being said. According to the US broadcaster, Trump was in a holiday dinner at his resort Mar-a-Lago, where initiation fees cost 200,000 US dollars and carries annual membership fees of $14,000, when he made the comment to the guests.

The White House was reached for a comment later, only reiterating the “benefit” brought about to the middle class by the new law.

The US economy has grown robust after Trump was sworn in. The stock markets constantly hit new records, unemployment dropped and Fed Reserve’s rate hike signalling that inflation has picked up. While Trump rushed to take credit, many have also argued that the recovery was set about by his predecessor, which left the tax bill the first act that bears only Trump’s mark. Whether it will become a success as the Republicans promised remains to be seen.

“Congratulations PM @theresa_may” – Donald Tusk, the European Council president

President of the European Council Donald Tusk speaks during the final press conference at the end of the European Union leaders summit at the European Council on December 15, 2017 in Brussels, Belgium. The European Council summit is meeting for two days to discuss issues related to Brexit, defense, education, immigration and foreign policy. VCG Photo

On the same day that Donald Trump boasted about his political success, thousands of miles away, another Donald tweeted about what he perceived also as a hard-won victory in the world of politics.

“EU leaders agree to move on to the second phase of #Brexit talks,” the European Council President Donald Tusk wrote on his twitter account, “congratulating” the woman who has been sitting across the negotiation table to him.

The issues about the divorce bill and the UK, Northern Ireland border have been solved but few would think the second phase talks will be in any way easier, during which London and the Brussels will have to settle down the frameworks such as legal cooperation and trade relations, so that each side can go home claiming a victory.

It will be a long way before the dust is down. Until then, economic uncertainties will always stalk the region.

“For his contributions to behavioral economics” – Nobel Prize committee

US economist and Nobel Prize for Sveriges Riksbank Prize in Economic Sciences 2017 laureate Richard H Thaler acknowledges applause after being awarded during the Nobel award ceremony at the Concert Hall in Stockholm, December 10, 2017.

Scientific breakthrough usually starts with questioning what has been deeply believed to be true.

Classic economy traditionally assumes that individuals always make prudent and logical decisions based on the available information to maximize gain or minimize loss. The problem is, do they? The study into this problem has formed the grounds on which Professor Richard Thaler, a US economist, was awarded the 2017 Nobel Prize for Economic Science.

By incorporating psychology with the study of economy, Professor Thaler tries to illustrate the irrational side of human’s decision making, and pioneers the “nudge theory” that proposes to optimize human behavior by positive reinforcement and indirect suggestion.

After the prize was announced, Prof Thaler said he would try to spend the money “as irrationally as possible.”

“If we are too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a ‘Minsky Moment’” – Zhou Xiaochuan, China’s central bank governor

Zhou Xiaochuan, China’s central bank governor /VCG Photo

When the China's central bank governor uttered the warning about the risk associated with the country’s mounting hidden debt in a public occasion on October 19, the pessimist observers of the world’s second largest economy felt the nightmare had realized. While the optimists sighed in relief that the recognition from senior official could be a battle cry in a war to root out the problem.

The war was declared two months later during China’s Central Economic Conference. Among the three “must-won” battles against economic woes setting China’s growth back, the one to reduce debt ranked on the top.

Looking into 2018, the governor’s warning will not be thrown behind back as the causes for “Minsky Moment” are still deeply entranced to be tackled overnight: local government borrowing streak, companies’ addiction to bank loans and household debt increasing due to housing prices rise.