Self-fulfilling expectations

Not long ago, the rich world was braced for a costly battle with inflation. Today it can seem as if the war has been won bloodlessly. In most rich countries, annual core inflation, which excludes volatile food and energy prices, has fallen from peaks of 5-8pc to a more tolerable 3-5pc. Growth varies from booming (America) to respectable (Australia, Canada, Japan) to tepid (Britain, the Euro area), but nowhere has it collapsed. In contrast to the disinflation of the 1980s, unemployment has stayed low. However, before the Covid-19 pandemic, the rich world enjoyed decades without any serious inflation problems. After ruthless monetary tightening in the 1980s, followed by a movement towards independent central banks targeting inflation, price surges seemed as outdated as shoulder pads. As firms and workers came to assume that inflation would stay low, they kept prices and wages in check. Their expectations thereby proved self-fulfilling.

(Adapted from “Central Banks Have Spent Down Their Credibility,” by The Economist, published on April 3, 2024)

Billionaire youths

All of the world’s billionaires younger than 30 inherited their wealth, research has found. It signals the first wave of “the great wealth transfer”, in which more than 1,000 wealthy people are expected to pass on more than $5.2tr to their heirs over the next two decades. There are already more billionaires than ever before (2,781), and the number is expected to soar in the coming years as an elderly generation of super-rich people prepare to give their fortunes to their children. The research by Forbes magazine found there were 15 billionaires aged 30 or under but that none had created their own wealth, instead benefitting from huge inheritances. Among them are the three children of Leonardo Del Vecchio, the founder of the luxury sunglasses company Luxottica. The world’s youngest billionaire is Livia Voigt, 19, who has a $1.1bn fortune thanks to a 3.1pc stake in WEG Industries, a Brazilian electrical equipment producer co-founded by her grandfather.

(Adapted from “All Billionaires Under 30 Have Inherited Their Wealth, Research Finds,” by Rupert Neate, published on April 3, 2024, by The Guardian)

Five leadership lessons

Here are five leadership lessons you probably forgot you learned in school and can start using now to get ahead at work: 1) Negotiation is an opportunity. In your current role, there are likely opportunities to negotiate all around you, for example, better pay and benefits. 2) Collaboration makes the world go round. You need to find smart ways to share your workload with others. 3) Always befriend the new kid. In college, you likely learned that cliques will limit you. 4) Don’t bite off more than you can chew. While your financial situation or ambition may have pushed you to overextend yourself in school, remember that things are likely a little different now. 5) Practical experience eats theory for lunch. In your career, especially for people who are interested in becoming leaders, it’s important to find opportunities to demonstrate your tactical abilities and your expertise.

(Adapted from “5 Leadership Lessons You Forgot You Learned Iin College,” by Kate Colbert, published by HBR Ascend)

AI disrupts Hollywood

In the good old days,” mused DreamWorks co-founder and former Disney CEO Jeffrey Katzenberg late last year, “it took 500 artists five years to make a world-class animated movie. I don’t think it will take 10 per cent of that three years out from now.” With Hollywood already replacing staff with generative AI tools, people working the industry want rules to govern the new technology and to make sure it does not use images they have created without compensating them. The US film, television and animation industry employs some 550,000 people, and the sector’s extensive use of technology makes staff particularly vulnerable to changes wrought by AI. A study published in January, commissioned by labour groups representing animators, cartoonists and other Hollywood artists, found 75pc of industry bosses had eliminated, reduced or consolidated jobs after introducing AI into their workplaces.

(Adapted from “Hollywood Animation, VFX Unions Fight AI Job Cut Threat,” by Reuters, published on April 8, 2024)

Published in Dawn, The Business and Finance Weekly, April 15th, 2024