It is plausible that recent low volatility is the new and persistent norm, with economic surprises muted and downside risks in decline.
As a tempestuous year in world politics comes to an unnerving close, in economics the nervousness flows from an almost entirely and strangely opposite cause. 2017 ends as the year of the risk conundrum.
Even as the advent of the Trump Administration, the UK’s great Brexit gamble, and the rise of populism and separatist tendencies in parts of Europe have raised the global political stakes, in the global economy both macro and market volatility have recently plummeted. Conditions, in fact, appear more stable than during the period of the Nineties and early 2000s, which itself became known as the ‘Great Stability.