Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Globalization’

THE GLOBAL ECONOMY IN 2030 TRENDS AND STRATEGIES FOR EUROPE

Posted by klausgabriel - 14. April 2014

The recent CEPS Study

Executive Summary

There is widespread consensus that the world will be richer and older by the year 2030, and there will be
somewhat smaller differences in GDP per capita across countries. There is also no doubt that the relative
weights of today’s advanced economies will diminish as the emerging market economies continue to
catch-up.
This study confirms this consensus and argues that the catch-up of emerging economies is not just a
temporary phenomenon, but one based on solid fundamentals that will continue to operate, even beyond
2030. It also provides some new insights, which in some cases deviate from the conventional wisdom.
Global trends
The global population might peak soon. One trend that has been regularly underestimated so far is
that population growth is declining everywhere. The year 2030 might mark an historical point in human
demography: the global population might reach a plateau and start to decline. This demographic turning
point is likely to have profound implications. The long-term outlook for the availability of natural
resources changes radically when the pressure of population growth disappears. The emergence of a
global middle class will of course lead to increased pressure on resources for some time to come; but if
the global population ceases to increase, the end of growth in resource use will be in sight.
A first corollary is that the availability of natural resources should not be a major concern. This
applies in particular to energy. There is actually too much carbon (in the form of coal and hydrocarbons)
available than could actually be used if the increase in global temperatures is to be kept to a manageable
level (usually assumed to be 2 degrees). Den Rest des Beitrags lesen »

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Can Liberal Democracy Survive the Decline of the Middle Class?

Posted by hkarner - 6. März 2014

This article is just essential and brilliant !!! (hfk)

Date: 05-03-2014Fukuyama cc
Source: Foreign Affairs By Francis Fukuyama
Subject: The Future of History

Can Liberal Democracy Survive the Decline of the Middle Class?

Something strange is going on in the world today. The global financial crisis that began in 2008 and the ongoing crisis of the euro are both products of the model of lightly regulated financial capitalism that emerged over the past three decades. Yet despite widespread anger at Wall Street bailouts, there has been no great upsurge of left-wing American populism in response. It is conceivable that the Occupy Wall Street movement will gain traction, but the most dynamic recent populist movement to date has been the right-wing Tea Party, whose main target is the regulatory state that seeks to protect ordinary people from financial speculators. Something similar is true in Europe as well, where the left is anemic and right-wing populist parties are on the move.

There are several reasons for this lack of left-wing mobilization, but chief among them is a failure in the realm of ideas. For the past generation, the ideological high ground on economic issues has been held by a libertarian right. The left has not been able to make a plausible case for an agenda other than a return to an unaffordable form of old-fashioned social democracy. This absence of a plausible progressive counter­narrative is unhealthy, because competition is good for intellectual ­debate just as it is for economic activity. And serious intellectual debate is urgently needed, since the current form of globalized capitalism is eroding the middle-class social base on which liberal democracy rests. Den Rest des Beitrags lesen »

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Don’t Just Do Something. Sit There.

Posted by hkarner - 27. Februar 2014

Date: 26-02-2014
Source: Thomas L. Friedman

With Russia growling over the downfall of its ally running Ukraine and still protecting its murderous ally running Syria, there is much talk that we’re returning to the Cold War — and that the Obama team is not up to defending our interests or friends. I beg to differ. I don’t think the Cold War is back; today’s geopolitics are actually so much more interesting than that. And I also don’t think President Obama’s caution is entirely misplaced.

The Cold War was a unique event that pitted two global ideologies, two global superpowers, each with globe-spanning nuclear arsenals and broad alliances behind them. Indeed, the world was divided into a chessboard of red and black, and who controlled each square mattered to each side’s sense of security, well-being and power. It was also a zero-sum game, in which every gain for the Soviet Union and its allies was a loss for the West and NATO, and vice versa.

That game is over. We won. What we have today is the combination of an older game and a newer game. The biggest geopolitical divide in the world today “is between those countries who want their states to be powerful and those countries who want their people to be prosperous,” argues Michael Mandelbaum, professor of foreign policy at Johns Hopkins. Den Rest des Beitrags lesen »

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Trade: Into Uncharted Waters

Posted by hkarner - 4. November 2013

Date: 04-11-2013
Source: The Financial Times

The pace of global trade has slowed. “For the past three decades, trade has regularly grown at twice the rate of world gross domestic product,” writes Shawn Donnan for the Financial Times. “This year, trade is expected to grow just 2.5 per cent, compared with GDP growth of 2.9 per cent.” Economists debate whether the dip is temporary or signals structural change in global trade and supply chains. Targets for blame include the eurozone debt crisis, rising labor costs in China, environmental and other regulations that mask protectionism, technological innovations that reduce manufacturing costs and jobs, and increasing representation of services in the global economy. More bilateral and regional agreements, as well as 160 WTO members giving a go-ahead to the Doha Round in December, could allow trade growth to resume, Donnan notes. Ongoing support for globalization, according to one research study, requires China to do more to open markets and advanced economies like the US to sustain support by resisting wage stagnation and inequality. – YaleGlobal

A 30-year trend of trade growing at twice the speed of the global economy has ended

Container ShipThe Tangerine Island, a bulk carrier sailing under the flag of the Marshall Islands, is moored in the Gulf of Panama after passing through the canal a few hours earlier. Off southern England, the 199-metre Turandot, a vehicle carrier, is setting a course for New York after leaving Southampton. In the Strait of Malacca off Sumatra, the Liberian-flagged Amazon River is steaming along at 16 knots.

This snapshot of the thousands of freighters crossing the oceans each day – as tracked this week on the £2.49 “Marine Traffic” app – suggests that the world’s seaborne trade is in rude health. But this picture obscures a statistical mystery; one that some see as a warning about the future of globalisation.

Global trade this year is expected, for a second year in a row, to grow at close to or even less than global economic output. This is an anomaly. Den Rest des Beitrags lesen »

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How Globalization Helped Decreasing Inflation

Posted by hkarner - 9. August 2013

 

Authors: Gregor Schwerhoff & Mouhamadou Sy · August 6th, 2013 · RGE EconoMonitor

Globalization in the form of increasing international trade increases competition both within and across countries. This increase in competition has put pressure on prices, which slowed inflation. Globalization therefore helps to explain the “Global Disinflation”, the phenomenon of decreasing inflation levels, in the last 20 years.

From 1990 to present, tariff rates around the world have declined continuously in a worldwide push to liberalize trade. As a result, trade has surged. The share of imports and exports in GDP increased from a global average of 38% in 1990 to 54% in 2005. While the causal link between tariff rates and trade is straightforward, there has been another and perhaps more surprising development. In the same period inflation fell from an average of 26% to a mere 4%, a trend called “Global Disinflation”. Figure 1 illustrates the parallel movement of tariff rates and inflation.
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Figure 1.Development of tariff rates (bold line) and inflation (dashed line), world averages

While these basic facts are widely known, Figure 2 reveals some interesting aspects behind them. It shows the cross country distribution of inflation across 123 countries for a given year and then compares the distribution over four different years: 1980, 1990, 2000 and 2010. This reveals three important features. First, since deflation is very rare, inflation values become strongly concentrated on values close to zero. Second, all world regions are affected so the development is not driven only by a few economic “heavyweights”. Third, the change occurs continuously over the entire period of 1990 to 2010, there is no jump in levels. Den Rest des Beitrags lesen »

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Is financial globalisation in retreat? And if so, does it matter?

Posted by hkarner - 27. Juni 2013

Richard Dobbs, Susan Lund (McKinsey Global Institute), 19 June 2013, voxeu

Is financial globalisation in retreat? This column suggests it might be. There’s been a recent and significant retreat in European financial integration and a retrenchment of global banking (although capital inflows into emerging markets and FDI are only just below their recent peaks). What are we to make of this shift? A more compartmentalised global financial system could certainly reduce the likelihood of a financial crisis spreading from one country to the next. But there is now a danger that the pendulum could swing too far, Policymakers should therefore do more to remove limitations on FDI and investor purchases of foreign equities and bonds, balancing the trade-off between the need for stability and the need to provide financing for economic growth.

Cross-border capital flows – including foreign direct investment, investor purchases of foreign bonds and equities, and cross-border lending – rose from $0.5 trillion in 1980 to a peak of $11.8 trillion in 2007 as national financial markets grew ever more tightly integrated. Yet when the crisis struck, that intricate web of connections rapidly transmitted shocks between countries confirming that the network of financial interdependencies can cascade risks (Elliott, Golub, and Jackson 2013). Den Rest des Beitrags lesen »

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Two Policy Prescriptions for the Global Crisis

Posted by hkarner - 24. April 2013

Date: 24-04-2013
Source: Project Syndicate

WASHINGTON, DC – One thing that experts know, and that non-experts do not, is that they know less than non-experts think they do. This much was evident at the just-completed Spring Meetings of the International Monetary Fund and the World Bank Group – three intense days of talks that brought together finance ministers, central bankers, and other policymakers.

Our economic expertise is limited in fundamental ways. Consider monetary and fiscal policies. Despite decades of careful data collection and mathematical and statistical research, on many large questions we have little more than rules of thumb. For example, we know that we should lower interest rates and inject liquidity to fight stagnation, and that we should raise policy rates and banks’ cash-reserve ratios to stifle inflation. Sometimes we rely on our judgment in combining interest-rate action with open-market operations. But the fact remains that our understanding of these policies’ mechanics is rudimentary.

These rules of thumb work (at least tolerably so) as a result of evolution. Over time, the wrong moves are penalized, and their users either learn by watching others or disappear. We get our monetary and fiscal policies right the same way that birds build their nests right. Den Rest des Beitrags lesen »

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Instead of the State, Globalization Has Withered

Posted by hkarner - 20. April 2013

Date: 19-04-2013
Source: The Canberra Times

Nations are keen to control globalization, welcoming the best ideas and talent and keeping away the problems, a task much easier said than done. Most nations appreciate a large choice in trendy products, hard-working and innovative immigrants, and a reputation for being cosmopolitan. The 2008 financial crisis enlarged rather than destroy government, fueled by fiscal stimulus spending, maintains Julie Novak in an opinion essay for the Canberra Times. “The consequence of this overspending was a dramatic increase in public-sector indebtedness, with some estimates indicating that debt owed by the globe’s taxpayers to each other, in the name of their governments, stands at more than $50 trillion,” Novak writes. “Conventional understandings of the arm’s-length relationship between fiscal and monetary policies, and the appropriate degree of monetary policy activism, have also been shaken to their core.” Long-term consequences could include skyrocketing costs for debt, stalled growth and protectionism. – YaleGlobal

The financial crisis prompted governments to spent heavily, perhaps taking on more debt than can be handled; stalled growth and protectionism could follow Den Rest des Beitrags lesen »

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Is This the End of Globalization?

Posted by hkarner - 5. März 2013

Date: 04-03-2013
Source: The Fiscal Times

Investors are less intent on pursuing cross-border profits, investing in overseas endeavors. A McKinsey Global Institute report measured money in the global financial system before and after the 2007-2008 financial crisis: In 2007, $11.8 trillion in investments and loans crossed borders; the figure for 2012 is $5 trillion. “McKinsey hedges the report by saying that some of the capital removed from the system was part of a necessary global correction,” reports David Francis for the Fiscal Times. “But it also warns that global growth would be extremely difficult without more money in the system.” The report presents two options, both posing challenges: Countries could become more isolationist, focusing on domestic development; this could stabilize markets, but sacrifice international growth. Or, financial institutions and policymakers could agree on global regulations that reduce risk in cross-border transactions. “But creating binding global financial regulations, and appointing a global authority to enforce them, would be extremely difficult,” Francis concludes. “Think of this authority like the International Monetary Fund with teeth, a kind of global S.E.C.” – YaleGlobal Den Rest des Beitrags lesen »

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Nations Can Try Promotion – Not Protectionism

Posted by hkarner - 7. Februar 2013

Date: 04-02-2013
Source: YaleGlobal

Competition among national governments to promote their markets in the global economy is increasingly intense. Governments are expected to regulate markets to reduce instabilities. In their pursuit of growth, many governments are timid, failing to govern their economies – missing global challenges and opportunities while neglecting social protections. Anthony D’Costa, professor and research director at the Asia Research Centre of the Copenhagen Business School, describes a strategy of economic nationalism in motion – less nation-centered and more cooperative, aiming for far-reaching, transformative policies, with an offensive rather than defensive stance and pragmatism rather than ideology. “Fostering national economic development and competitiveness, promoting national companies and brands, is part of the economic-nationalism-in-motion portfolio,” he notes. “Market-driven globalization is not incompatible with state intervention.” D’Costa urges countries to re-examine economic-nationalism tendencies that reinforce rising inequality and other social problems. – YaleGlobal

Selective engagement with the global economy, prioritizing growth, spurs inequality Den Rest des Beitrags lesen »

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