Earlier this month, Minnesota Public Radio host Gary Eichten, economist Louis Johnston and I held a public discussion at St. John's University in Collegeville, Minn., on the economic outlook for the coming year. My main takeaway? It's impossible to leave campus after talking with students and not believe that the world is destined to become a better place.
In reflecting on our economic discussion, I decided to focus this column on five major trends I believe will shape our economy, markets and society in the coming decade. These trends aren't new, but their impact is cumulative and gathering momentum — for better and for worse.
First is globalization, an abstruse jargon term for capturing the greater economic integration among nations. The globalization story is typically two steps forward, one step back. We're going through a step-back period, but most countries will stick with more open borders since the economic benefits outweigh the negatives.
Second, technological innovation. Think quicksilver communications, artificial intelligence, Big Data, robots and automation. In an increasingly networked economy, we've barely touched on the economic possibilities.
Third, inequality. Millions of Americans are struggling to get by these days. Key to reviving dynamism and prosperity in America is increasing the incomes and job prospects in low-wage to no-wage communities.
Fourth is aging. We're living longer, on average. An aging population is reimaging and rethinking the second half of life, searching for meaning and money, purpose and a passion.
Fifth is sustainability. The Paris climate-change accord opens the prospect that the economics of embracing sustainability are moving from the economy's tributaries into the mainstream of U.S. society.
These five trends have broad implications for managing our money in coming years, as well as our jobs. For example, these trends suggest the economy will be increasingly volatile. One way to deal with a volatile economy is to construct a household balance sheet that is heavy on cash for downside safety and upside opportunity, with very little to no debt, and an embrace of a diversified equity portfolio for long-term returns. It's also important to maintain and add to your skills. And take a walk around a college campus and talk to some students. Their optimism is infectious.
Christopher Farrell is senior economics contributor for "Marketplace" and a commentator for Minnesota Public Radio.