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message on economic reform. It is likely, I believe, that the focus of the general public will be moved to these critical economic reforms. (3) I repeat a point I’ve made in the past, that because the mainstream media and most scholars are still so skeptical of Mr Trump’s policies, the hurdle for him to clear and impress positively is very low. Ironically, such general hostility will probably work in favour of the Trump Administration. 5 days after the surprise election victory, the press declared that Mr Trump’s transition plan was in hopeless disarray, only for Mr Trump to announce one cabinet appointment every day – ahead of the schedule of Presidents Obama and Bill Clinton when they got elected. (4) We will likely see a less radical President Trump. We have already seen this on various issues (the Wall, prosecuting Ms Clinton), and my guess is that the trade policy will be more restrictive, but the changes will be nuanced at the same time. The appointment of the next Treasury Secretary will convey an important message. (5) I personally think that various countries will likely adopt industrial policies, as a substitute for slower trade globalization. Already, the UK’s PM May announced an ambitious industrial strategy, with a focus on technology. The government is committed to investing in R&D through the Industrial Strategy Challenge Fund. Regular readers of our work should also know that that is what I would recommend for Japan to consider. I just came back from a trip to Singapore, and understand that the government there is also struggling to find the best strategy to deal with the next phase of economic development, now that the growth model based on trade and finance may be coming to an end. I think the US should also contemplate its own industrial policy. The title of this section is ‘economic Olympics’ to convey the notion that the world is in competition, not just along the axes of cheapness of labour and technology. There are different disciplines (analogous to the various sports in Olympics) in which any country can excel, if the efforts are appropriately focused. Instead of being mediocre in many events, countries should seek to win the gold medal in their best events…

5%-plus nominal GDP growth in the US in 2017? There are several inconsistencies in the market trends: (1) a strong dollar and strong US equities; (2) protectionism and a strong dollar (Mexico, for example, has gotten 10% cheaper so far this month, and China is also cheaper. The greater the threats of protectionism against these countries, the cheaper are their costs of production…); (3) higher yields and strong equities; (4) Mr Trump does not like Chair Yellen or the Fed but he still needs and prefers low interest rates. The only variable that can address these inconsistencies is 3-4% real economic growth and 5%-plus nominal GDP growth in the US. While it is unlikely that 5% nominal GDP growth is sustained over time, the atmospherics will stop the talk about ‘r-star’ and help support interest rates in the US. 2017 may very well see 5%-plus nominal GDP

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