Is the global economy thriving, diving or both? Perhaps quantum theory can help explain
- The trade war is hitting manufacturing activity, particularly in South Korea, Taiwan, Japan and Germany, but the services sector – key for employment and consumption – remains resilient. However, things could change if uncertainties drag on
Earlier this year, IBM unveiled the first ever commercial quantum computer. In quantum processing, unlike the binary code programming of older computers, something can exist as a 0 or a 1 and everything in between, all at the same time.
That’s akin to Schrödinger's cat, which in the famous thought experiment would be both dead and alive if quantum theory were applied. It was meant to show that simple misinterpretations of theory can lead to absurd results which do not match the real world.
Today’s economy, where different sectors are exhibiting differing signs of life, is similar. So, is the proverbial cat dead or alive, or both?
When it comes to the corporate outlook in the manufacturing sector, things have been on the slide. The global purchasing managers’ index (PMI) for May did not paint a hopeful picture. These indices have been a dependable proxy for economic growth, with a move below 50 indicating a contraction in manufacturing activity and growth in the months ahead.