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A recent study that used the archives of almost two centuries of newspapers concluded that positive news-based economic sentiment actually predicts economic growth, even more than economic growth drives sentiment. Research by former World Bank economist Charles Kenny nearly a decade ago supports this stance: optimism correlates with faster productivity growth and stronger economic performance.
“Up North: On Top — Life in Canada, Home of the World’s Most Affluent Middle Class.” — New York Times, April 30, 2014 This was the headline just a decade ago. The American middle class, “long the most affluent in the world...lost that distinction.” The new leader at that time? Canada — seen as a model for the rest of the world.
The old joke that “economists exist to make weathermen look good” may feel especially relevant today. So far, 2025 has proven just how unpredictable the near-term outlook can be.
As we head into another year, the classic question feels as relevant as ever: is the glass half full or half empty?
