Markets look calm. But the chaos may already be building

Nifty22, 421.95-198.5. Motilal Oswal Midcap Fund Direct-Growth.

Key points

• Michael Spence won the Nobel Prize in Economics in 2001 for his influential work in signalling in the job markets.
• Michael Spence highlights the economic expansion of India and China, noting India's potential expansion trajectory.
• There could be a pretty major global shock, states Nobel laureate & economist Michael Spence.
• The Economic Times daily newspaper is available online now.

Nifty22, 421.95-198.5. Motilal Oswal Midcap Fund Direct-Growth. The Economic Times daily newspaper is available online now.

There could be a pretty major global shock, states Nobel laureate & economist Michael Spence. ET BureauLast Updated: Oct 03, 2026, 11: 41: 00 PM IST.

Michael Spence highlights the economic expansion of India and China, noting India's potential expansion trajectory. He emphasizes India's advancements in digital infrastructure, particularly in digital financial services like UPI. Spence discusses the significance of AI in economic development and its anticipated impact over the next decade. He warns of potential economic shocks due to rising debt levels and high market valuations. Listen to this article in summarized format. Unlock AI Briefing and Premium Content. New Year Offer 24 Hours Left. Subscribe Now Already a member? Sign In.

Michael Spence won the Nobel Prize in Economics in 2001 for his influential work in signalling in the job markets. It has since become among the most exported ideas into other fields from economics, with applications in contracts, modern payments systems, tokenisation, public block chains and much else. A long-time observer of emerging economies as the chairman of the World Bank's Commission on Expansion and Development, Spence is at present Philip H Knight professor and dean, emeritus, at Stanford Graduate School of Business. In India to launch the Iron Pillar Initiative in Global Learning at Ashoka University, he spoke to Sruthijith KK regarding India, China, AI, productivity, signalling, Trump and global economic headwinds. Edited excerpts: You have observed India and China for a long time. How do you view their evolution? India is particularly special, so I come back as often as I can, and I think it's been pretty frequent in the last 20 years. My interest blossomed when we were doing the (World Bank) expansion commission work. I think both India and China are the future economic giants. It's almost impossible if you're interested in this general story not to be interested in these two. China obtained off to a faster start. India began this reform process in the early 90s.

In short, markets look calm. But the chaos may already be building is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.