Bad Moods Are the Other Global Migration Problem

The unsettling reality of today’s world is that a bad mood can move readily from one country to another, even when events on the ground call for moderation or optimism. Or in the language of financial economics, emotional and ideological contagion is becoming a more important source of systemic risk. The spread of revolutions during the Arab Spring showed how trends can move from one nation to the next, and now it seems similar processes are influencing wealthier nations as well.

Consider Australia. The country has not had a recession in 25 years, unemployment is currently a modest 5.8 percent, and the country has handled the China slowdown and the decline in commodity prices fairly well. The boom days are gone, but Australia is still growing at an annual rate of slightly over 3 percent.