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A fresh article by economist Kenneth Rogoff suggests that resistance to Donald Trump is softening even at a place like Harvard.

Only two months ago, Rogoff, a Harvard professor and former chief economist with the International Monetary Fund, told financial Website Business Insider that he was nervous about the possibility of a Donald Trump presidency.

“It just creates so much uncertainty,” Rogoff said in an interview with Business Insider. “I feel safer having someone I think I know and understand better — Secretary Clinton — than I do with someone as erratic as Trump.”

Since Rogoff is not viewed as anyone’s idea of a liberal – he even advised Republican Sen. John McCain’s presidential campaign in 2008 – these words seem to carry extra weight.

But in a piece posted Wednesday on the Project Syndicate site, Rogoff now wonders whether boom times could be ahead because of Trump’s proposed mix of policies including lower taxes and business regulation and added fiscal stimulus through infrastructure spending.

“I am certainly not saying that repealing Obama-era regulation will improve the average American’s wellbeing,” writes Rogoff. “Far from it. But businesses will be ecstatic, maybe enough to start really investing again. The boost to confidence is already palpable.”

Rogoff, a co-author of the much discussed This Time is Different: Eight Centuries of Financial Folly, concedes that Trump’s proposals to cut taxes for individuals and corporations may disproportionately benefit the rich.

“True, putting cash in the pockets of rich savers hardly seems as effective as giving cash to poor people who live hand to mouth,” he writes. “Trump’s opponent, Hillary Clinton, memorably spoke of ‘Trumped-up trickle-down economics.’ But, Trumped-up or not, tax cuts can be very good for business confidence.”

Rogoff also sees big benefits to a huge expansion of badly needed infrastructure spending. He writes that ever since the 2008 financial crisis, economists across the political spectrum have argued for taking advantage of ultralow interest rates to finance productive infrastructure investment, even at the cost of higher debt. “High-return projects pay for themselves,” he adds.

He cautions that “all of this is an optimistic spin on a Trump economy.”

“If the new administration proves erratic and incompetent (a real possibility), dejection will quickly overwhelm confidence,” he writes. “But beware of pundits who are certain that Trump will bring economic catastrophe.”

Rogoff concludes by pointing out that “you don’t have to be a nice guy to get the economy going. In many ways, Germany was as successful as America at using stimulus to lift the economy out of the Great Depression.”

While Trump might appreciate Rogoff’s change of heart about the prospect of his presidency, we can bet that he won’t like the Germany analogy.

I’ll close with a bit of sound, timeless investment advice from Ben Carlson, a financial advisor at Ritholtz Wealth Management who runs his own respected financial blog, A Wealth of Common Sense.

Carlson’s post about the benefits of international stock diversification was prompted by a recent article in The Wall Street Journal that highlights the performance dominance of U.S. stocks over the rest of the world in recent years.

Since 2012 alone, the U.S. share of global stock market capitalization has risen from roughly 35% to just over 40% of the total.

“I’ve had plenty of questions from investors asking me why they should ever own foreign stocks when they see” strong outperformance by U.S. stocks, writes Carlson. “It’s a legitimate concern. We humans are an impatient group so it can be difficult to see valid reasons for diversification....”

But Carlson offers up the words of Oaktree Capital chairman Howard Marks who once said, “In the world of investing nothing is as dependable as cycles.”

And the data show that at various times over the past two decades, international stocks have sharply outperformed U.S. stocks over trailing five-year periods.

“It’s easy to say that you’ll be happy only investing in U.S. stocks today because it feels much better when you’re invested in the best performer as opposed to the worst performer,” adds Carlson. “It may not be all that easy when the cycle inevitably turns. And it will turn at some point. The U.S. doesn’t have a monopoly on stock market returns, profit growth, dividend payments, innovation or good ideas.”

Email: john.kimelman@barrons.com

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