On November 7, 2018, “Future is Here: Global Leaders on the Changing World” lecture series, jointly organized by the PBC School of Finance of Tsinghua University (PBCSF) and National Institute of Financial Research (NIFR) of Tsinghua University, hosted Dr. Jacob Frenkel, Chairman of JPMorgan Chase International, for a lecture entitled “The Global Economy and Policy Challenges”. By invitation of Dr. Min Zhu, Chair of National Institute of Financial Research (NIFR) of Tsinghua University and former Deputy Managing Director of IMF, Dr. Jacob Frenkel presented his views on the global economic future. Hundreds of EMBA and Executive Education alumni, faculty and students from Tsinghua PBCSF attended the lecture.
Dr. Jacob Frankel is a world-leading economist who has made great contributions to academia, the public sector, international organizations and large financial institutions in his career of more than forty years. His previous positions include professor of economics at the University of Chicago, Economic Counselor and Director of Research at the International Monetary Fund and Governor of the Bank of Israel. He has been a member of the J.P. Morgan International Council since 2009. He is also the Chairman and CEO of the G-30 Group.
Dr. Jacob Frankel shared his insights into the global economic growth, monetary policies, interest rate normalization, China’s trade, as well as long-term challenges of the world economy. He expressed that ten years ago, during the financial crisis, the economic growth rates of developed countries had been negative, whereas developing countries did a better job. Since developing countries had drawn lessons from previous debt crises and the Asian Financial Crisis a decade earlier, they had been better prepared. On the contrary, developed economies suffered a setback in the 2008 financial crisis because they failed to price risks reasonably. When it comes to responding to the crisis, he said that in addition to traditional monetary policies, namely lowering interest rates, or fiscal policies, namely expanding deficits, attention should also be given to unconventional monetary policies, such as the purchasing of non-performing assets by central banks, which is a way to increase liquidity of the economic system through quantitative easing measures. Regarding interest rate normalization, Dr. Jacob Frankel compared the differences between Europe and the United States, and analyzed the different stages of normalization in terms of unemployment rate and inflation.
On the topic of China-US trade frictions, Dr. Jacob Frankel emphasized the importance of trade and its efficiency, and acknowledged China’s crucial position in world trade today. He also pointed out that in order to cope with China’s high foreign exchange reserves, exchange rate measures and monetary policies are not enough, and that the savings rate was another indicator on which we need to focus. At last, Dr. Jacob Frankel discussed upcoming demographic challenges to the world economy after analyzing the aging structures of both developed and developing countries, emphasizing that governments should be prepared to deal with their economic impact.
During the Q&A session, Dr. Jacob Frankel answered questions on international trade and China-US relations, US monetary policy normalization, the role of the European Central Bank as well as global crisis prevention.
In the end, Dr. Min Zhu summarized the key points of this lecture. First, when faced with emerging problems in a new environment, we need to explore new policy tools to cope with future challenges. Second, as the Federal Reserve raises interest rates, emerging markets should be well prepared for spillover effects. Lastly, in light of Dr. Jacob Frankel’s own career path, Dr. Zhu advised the audience that there is no shortcut to success and that they should not be afraid of failures. Instead, they should equip themselves with an open mind and a down-to-earth attitude in order to succeed in the future.
“Future is Here: Global Leaders on the Changing World” lecture series invites world-renowned leaders from economic, financial, social and academic circles to project and contemplate on global development trends, with the aim of building a first-class exchange platform for Tsinghua students, faculty and alumni and helping them grasp the latest trends and develop the habits of lifelong learning.
Past guest speakers include Maurice Obstfeld, Economic Counsellor and Research Department Director of IMF, Peter Maurer, President of the International Committee of the Red Cross (ICRC), Harvey Schwartz, former President and COO of Goldman Sach., Jacob Frenkel, Chairman of JPMorgan Chase International, and Douglas Peterson, CEO of S&P Global.
