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Illustration: Aïda Amer/Axios
As global growth continues to fall, the world’s top economists and financial authorities are signaling an openness to experimenting with previously fringe economic ideas that just a few years ago would have been considered extreme or even laughable.
What they're saying:
What’s happening: Central bank policies, which now include negative interest rates in Japan and the eurozone, have yielded negligible improvement.
Reality check: The unorthodox policies are being encouraged by either former central bankers or those like Draghi who are on their way out of office. Current central bank leaders largely continue to reject such ideas, even in the face of growing evidence their policies aren't working.
The big picture: “The Fed needs new ideas,” Christina Romer, a former chair of the Council of Economic Advisers, told Axios at this week's National Association of Business Economists conference in Denver.
For anyone looking, there are a growing number of unorthodox ideas on the horizon — from mainstream, highly credentialed economists.
Federal Reserve economist Claudia Sahm has proposed automatic government payments directly to individuals when the 3-month average unemployment rate rises 0.50 percentage points above the low from the previous year.
Romer told Axios she supports similar plans that include so-called automatic stabilizers, or government spending, that activates based on data rather than legislators needing to authorize new spending.
Catherine Mann, a former chief economist at the OECD and current global chief economist at Citi Research, has proposed a program that would use central bank funds to deposit shopping vouchers directly into consumers' accounts.
Julia Coronado, a former Federal Reserve economist and current president of MacroPolicy Perspectives, said she's working on a paper that will advocate combining helicopter money with a central bank digital currency.
The Institute of International Finance on Thursday lowered its growth forecast for 2019, the latest in a series of downward revisions from international economic organizations since the beginning of last year.
What's next: The IMF and World Bank earlier this week said they expect to write down their 2019 growth projections again — the third downward revision this year — at their meetings next week in Washington, D.C.
The big picture: “The global economy is now in a synchronized slowdown,” incoming IMF managing director Kristalina Georgieva said at a recent news conference.
Flashback: It hasn't even been 2 years since then-IMF managing director Christine Lagarde said in January 2018 that the global economy was experiencing “the broadest synchronized global growth upsurge since 2010" and that “all signs point to a continuous strengthening.”
Investors moved an additional $20.2 billion into money market funds last week, while pulling $13.8 billion out of equity funds, data from the Investment Company Institute shows.
Why it matters: The increased desire for money market funds, which are ostensibly savings accounts, has come as yields on the 10-year Treasury note fell from 2.51% on April 3 to 1.59% on Oct. 2, showing it's fear rather than greed driving fund flows.
Details: Year to date, investors have moved $424 billion into money market funds, $361.5 billion of which has been deposited over the last 6 months. Conversely, $154.1 billion has been drained from equity mutual funds and ETFs in 2019, with $136.9 billion of outflows coming in the past 6 months, according to ICI's data.
Apple's stock rose 1.35% Thursday, more than doubling gains by the S&P 500 and the Nasdaq and touching a 52-week high.
What's happening: Apple shares have seen that kind of outperformance all year. The stock price has risen by around 45% this year, more than double the S&P's YTD gains and well above the 29% rise of tech ETF XLK. It's also the best-performing FAANG stock this year by a wide margin.
Yes, but: Wall Street analysts remain bullish on Apple in words, but the average price target is below the company's current $230 stock price.
Watch this space: Apple also continues to see overall iPhone sales drop, with volumes expected to fall 15% this year from 2018's total, according to a September report from IDC.