PUBLIC VS. PRIVATE
After a decade of primacy for the private sector, the public sector will take a bigger role in the economy. Government will have a bigger hand in allocating capital, for example, as it bails out troubled industries such as airlines.
DEFENSE SPENDING
Economic resources will shift from private business investment to defense and security-related spending, lowering growth rates.
INNOVATION
R&D money will shift toward technologies that enhance national security and away from innovations that enhance economic productivity.
TRADE FLOWS
Concerns about terrorism will result in costlier airfreight and slower processing at customs, making foreign trade more expensive.
IMMIGRATION
Increased border controls or immigration restrictions could limit the entry of workers, tightening labor markets and slowing growth.
SOCIAL SPENDING
A contracting economy and soaring unemployment will force higher spending on the social safety net.
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