Gita Gopinath
Series on the Future of the International Monetary System (IMS), Stanford Institute for Economic Policy Research
Global economic ties are changing in ways we have not seen since the end of the Cold War.
After years of shocks—including the COVID-19 pandemic and Russia’s invasion of Ukraine—countries are reevaluating their trading partners based on economic and national security concerns. Foreign direct investment flows are also being re-directed along geopolitical lines. Some countries are reevaluating their heavy reliance on the dollar in their international transactions and reserve holdings.
All of this is not necessarily bad. Given the recent history of events, policymakers are increasingly—and justifiably—focused on building economic resilience. But if the trend continues, we could see a broad retreat from global rules of engagement and, with it, a significant reversal of the gains from economic integration.
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