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Global Trade

05 October 2018 / US

End of the 'flat world'

A few years before the 2008 financial crisis, journalist Tom Friedman captured the zeitgeist with his argument that 'the world is flat', that all competitors in the global economy have an equal opportunity to succeed. But if it was once possible to argue that (Western-led) politics and technology were creating a flat world, today they are combining to create a more lumpy, multipolar system. Developments in North America, Europe and the Asia Pacific region point towards the rise of more regionally-ordered trading systems.

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25 September 2018

Where next for the euro?

A discussion with Peter Praet, Member of the Executive Board of the ECB

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07 September 2018 / Global

Changing importance of foreign exchange reserves

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17 August 2018 / Global

Winners and losers

The much-desired multipolar world is here, but this does not herald the return of anarchy. Donald Trump's post-Davos world represents the next phase of capitalism after the liberal trading order that started in 1995. With a plethora of interested parties, rather than just two competing superpowers, there will be winners and losers. The world system of the past quarter-century was never as faultless as often advertised. We should get on with making the best of circumstances which are neither as new nor as troublesome as many imagine.

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15 August 2018 / Global

Consequences of 2008

When the 2008 financial crisis came, few thought the ensuing recession would have such long-lasting consequences. But 10 years later, the fault lines previously hidden in the economic structure have become clear. Every trading regime has gainers and losers. To maximise social welfare, those who gain from the benefits of free trade are expected to compensate those who suffer losses. Of course, no one is actually compensated; the losers simply adjust to their losing positions.

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13 August 2018 / Global

Welcome to the multipolar world

The end of the cold war and the WTO's genesis made commentators call the 1990s 'the end of history', with the US as the sole superpower. It was never as simple as that. Many in the liberal order wished for a multipolar world. And this is what they have now got. US President Donald Trump plays a big part in this as he seeks to redefine the liberal free trade system that has underpinned the postwar 'Davos age' of globalisation. For a while between 1995- 2008, everyone was happy. But it couldn't last.

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31 July 2018 / Asia Pacific

Beijing won’t ‘weaponise’ the renminbi

As US-China trade tensions have become trade skirmishes, and now threaten to become a trade war, most of the actions have been on tariffs and goods trade. The developing trade conflict has taken place in an environment of very strong US economic performance while Chinese growth has been slowing. Renminbi depreciation has led to concerns that this is taking place with People's Bank of China encouragement and that China may 'weaponise' its exchange rate, opening up a new front in the trade conflict.

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30 July 2018 / US

Doomed US trade policy

President Donald Trump's trade policy suffers from the most basic of contradictions that doom it to failure. Purportedly, the administration wants to impose increased import restrictions on trade partners to help eliminate the US trade deficit. Yet, the administration is following policies that will increase the US budget deficit and that will have the unintended consequence of strengthening the dollar. That combination is certain to cause the US trade deficit to widen, rather than to narrow.

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26 July 2018 / US

Sleepwalking towards a US-German trade war

Countries tend to go to war with one another when they have irreconcilable differences on a big issue, on which they entertain very different points of view. The same would seem to be true of trade wars. Despite this week's compromise between President Trump and the European Commission, the US-German dialogue on Germany's outsized current account surplus is likely to end in a full-scale trade war.

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