Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Globalization’

Trump Rides a Wave of Fury That May Damage Global Prosperity

Posted by hkarner - 11. November 2016

Date: 10-11-2016
Source: The New York Times

A populist insurrection is gaining force in much of the world, drawing middle-class and blue-collar recruits who lament that they have been left behind by globalization. This upheaval threatens to upend the economic order that has prevailed since the end of World War II.

This was evident before Donald J. Trump’s triumphant rogue campaign for the American presidency. Now it is beyond argument.

National leaders in Europe and North America are scrambling to placate energized, often unruly groups of people demanding change and a more generous share of the economic spoils. But the options for addressing the deficiencies of capitalism are severely constrained — both by traditional political realities and by the broader truths of the global economy.

In Britain, which shocked the world in June with its so-called Brexit vote to abandon the European Union, and now in the United States, with its stunning elevation of Mr. Trump, electorates have essentially handed governments a mandate to limit free trade. Voters have unleashed this action plan in the name of lifting the fortunes of working people. Den Rest des Beitrags lesen »

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Crazy Campaign Ends With Upset, and Hard Work of Governing Begins

Posted by hkarner - 10. November 2016

Date: 09-11-2016
Source: YaleGlobal

US voters elected Donald Trump as the 45th president of the United States, and globalization was pummeled. The United States is deeply divided over policies on trade, immigration and alliances for financial, environmental and national security. Democracy was tarnished, too as some politicians threaten US governance by refusing to compromise. Economist David Dapice reviews the many challenges confronting the next administration: debt-ridden China that concentrating power, Russia intent on aggressive interventions in Ukraine and the Middle East, rage over increasing inequality and a changing climate that threatens global coastlines and food supplies. Dapice concludes, “Unless or until more of the major actors develop an inclusive strategy to share the costs of global governance, no nation will be secure or sustain progress.” As president, Trump must rally US citizens by both leading and cooperating on global challenges, or the world will muddle along, snarled and angry. – YaleGlobal

Trump wins contentious US election for president, but globalization loses with a bitterly divided electorate

TrumpClaiming the prize: Reality TV star Donald Trump is poised to claim the White House; women whom he insulted will remain unhappy citizens

MEDFORD: It’s Brexit all over again. Donald Trump, a candidate who managed to offend most demographics, shocked the world by winning the US presidential race. The race’s competitiveness suggests deep dissatisfaction with the status quo, and governing such a discontented nation promises to be a challenging task. Republicans retain control of the Senate and the House of Representatives.

In the United Kingdom, the Brexit vote underlined the discontent many felt while the European Union faces rising extremist parties and calls for similar referenda. Meanwhile Syria and Yemen are being destroyed. Deranged democracies in Venezuela and the Philippines and dysfunctional dictatorships in North Korea, Zimbabwe and arguably Thailand all point to an unraveling that is beyond worrying. If this were not enough, a debt-ridden Chinese economy doubles down on old solutions while becoming ever more aggressive externally, and Russia’s economy sinks while Putin fiddles in Ukraine and Syria. Is this where globalization has brought us? Den Rest des Beitrags lesen »

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The Retreat of Financial Globalization?

Posted by hkarner - 5. November 2016

By on November 3, 2016  RGE EconoMonitorJoyce cc

Matthieu Bussière and Julia Schmidt of the Banque de France and Natacha Valla of CEPII (Centre d’Etudes Prospectives et d’Informations Internationales) compare the record of the period since 2012 with the pre-crisis period and highlight four conclusions. First, the retrenchment of global capital flows that began during the crisis has persisted, with gross financial flows falling from about 10-15% of global GDP to approximately 5%. Second, this retrenchment has occurred primarily in the advanced economies. particularly in Europe. Third, net flows have fallen significantly, which is consistent with the fall in “global imbalances.” Fourth, there are striking differences in the adjustment of the various types of capital flows. Foreign direct investment has been very resilient, while capital flows in the category of “other investment”—mainly bank loans—have contracted substantially. Portfolio flows fall in between these two extremes, with portfolio equity recovering much more quickly than portfolio debt. Den Rest des Beitrags lesen »

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Can Globalization Be Salvaged?

Posted by hkarner - 4. November 2016

Date: 03-11-2016
Source: The Wall Street Journal

Populist opposition will shape how trade and immigration expand, if at all

Regardless of the election’s outcome, support for the antiglobalization message of Donald Trump’s campaign is unlikely to go away.

No matter what happens in this election,” venture capitalist Peter Thiel said in Washington this week, “what Trump represents isn’t crazy and it’s not going away.”

When it comes to globalization, Mr. Thiel, a prominent donor to Republican nominee Donald Trump, is almost certainly right. Mr. Trump is unique, but his antipathy to free trade and increased immigration isn’t.

Those sentiments are shared in differing degrees by the Democratic voters who propelled Vermont Sen. Bernie Sanders to second place in the party’s primary, by the Britons who voted to leave the European Union in June, and in the populist parties gaining strength across Europe. Hillary Clinton may have turned against the negotiated, unratified 12-nation Trans Pacific Partnership to fend off Mr. Sanders, but is unlikely to flip back. Why spend scarce political capital on a treaty much of her party despises? Den Rest des Beitrags lesen »

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Four Fallacies About Trade and Globalization

Posted by hkarner - 29. Oktober 2016

Date: 28-10-2016
Source: YaleGlobal

Trade – along with the accompanying fears over foreign competition, job loss and reduced wages – is a hot issue for the US presidential campaign and elections elsewhere. Ajai Gaur and Ram Mudambi, professors of international business strategy at Rutgers University and Temple University, analyze four fallacies associated with trade, globalization and manufacturing in advanced economies. Manufacturing jobs are no longer the basis of US prosperity. “Most advanced economies have become primarily service economies,” they explain. “Rich countries are service economies, focused on finance, engineering, design and health care, and this is dictated by their comparative advantage.” Also, imports do not make a country poor, and the most competitive companies both import and export to attract foreign investment and capital. Foreign firms can provide immense benefits for the economies of other nations, and the global supply chain allows domestic firms to become exporters by proxy without the risks of international activity. Gaur and Mudambi urge politicians to reject the fallacies and citizens to make informed decisions before voting. – YaleGlobal

Fear of trade overlooks that most value creation in advanced economies is based on services, not manufacturing

mfg-emplomentNEWARK, PHILADELPHIA: Trade typically figures prominently in US presidential election, and 2016 is no exception. While campaigning, politicians tend to adopt anti-international business positions that are theoretically unsound and lack empirical evidence.

Four fallacies underline these common political arguments.

Fallacy 1: Manufacturing jobs are the basis of American prosperity.

Fallacy 2: Imports make us poorer.

Fallacy 3: Success of foreign firms always helps foreign countries, success of US firms always helps the US economy.

Fallacy 4: To export, firms must sell to buyers in foreign countries.
Den Rest des Beitrags lesen »

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The Anti-Democratic Heart of Populism

Posted by hkarner - 28. Oktober 2016

Photo of Andrés Velasco

Andrés Velasco

Andrés Velasco, a former presidential candidate and finance minister of Chile, is Professor of Professional Practice in International Development at Columbia University’s School of International and Public Affairs. He has taught at Harvard University and New York University, and is the author of numerous studies on international economics and development.

OCT 27, 2016 Project Syndicate

SANTIAGO – Many of the men and women who turned out for the annual meeting of the International Monetary Fund in early October were saying something like this: “Imagine if the Republicans had nominated someone with the same anti-trade views as Trump, minus the insults and the sexual harassment. A populist protectionist would be headed to the White House.”

The underlying view is that rising populism on the right and the left, both in the United States and in Europe, is a straightforward consequence of globalization and its unwanted effects: lost jobs and stagnant middle-class incomes. Davos men and women hate this conclusion, but they have embraced it with all the fervor of new converts.

Yet there is an alternative – and more persuasive – view: while economic stagnation helps push upset voters into the populist camp, bad economics is neither a necessary nor a sufficient condition for bad politics. On the contrary, argues Princeton political scientist Jan-Werner Mueller in his new book: populism is a “permanent shadow” on representative democracy.

Populism is not about taxation (or jobs or income inequality). It is about representation – who gets to speak for the people and how. Den Rest des Beitrags lesen »

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Ökonom Fratzscher zu Kern: „Chancengleichheit gibt es nicht mehr“

Posted by hkarner - 14. Oktober 2016

 14. Oktober 2016, 08:25

Kommen Ceta und TTIP nicht, werde Europa an Einfluss verlieren, warnte Fratzscher den Kanzler bei einer Diskussion

FratzscherWien – Mit seinem Buch „Verteilungskampf“ hat Marcel Fratzscher Anfang des Jahres in Deutschland eine Debatte über Arm und Reich ausgelöst. Am Donnerstag diskutierte der Ökonom und Chef des Deutschen Instituts für Wirtschaftsforschung im Kreisky-Forum in Wien mit Bundeskanzler Christian Kern (SPÖ). Thema war auch hier die in den vergangenen Jahrzehnten gestiegene Ungleichheit bei Vermögen und Einkommen.

Die Realität entspreche längst nicht mehr einer sozialen Marktwirtschaft, die im Deutschland der Nachkriegszeit lange ökonomischer Konsens gewesen sei, so Fratzscher. Diese umfasse Wettbewerb, Sozialstaat und Chancengleichheit – und Letztere bestehe nicht mehr.

Schwieriger gesellschaftlicher Aufstieg

Sozialer Aufstieg durch harte Arbeit sei heute schwieriger zu erreichen als noch vor einigen Jahrzehnten, sagt Fratzscher. Und auch das Bildungssystem schränke die soziale Mobilität ein. „In keinem Land ist das Einkommen so stark vom Bildungsstand der Eltern abhängig wie in Deutschland“, so der frühere EZB-Ökonom. Ein weiterer Indikator für die Ungleichheit: die Einkommensunterschiede zwischen den Geschlechtern, die in Deutschland und Österreich besonders hoch seien. Fratzscher verweist auf aktuelle Zahlen, wonach Frauen in beiden Ländern im Schnitt noch immer 22 Prozent weniger verdienen als Männer.

Die Verteilungsfrage sei die wichtigste politische Frage unserer Zeit, sagt Fratzscher und führt das aus: Die ärmere Hälfte der Bevölkerung besitzt nur drei Prozent des gesamten Nettovermögens. Österreich gehört hier zu den hochentwickelten Ländern mit der dramatischsten Schieflage. Und auch bei den Einkommen geht die Schere seit Jahrzehnten auf, die Realeinkommen von Geringverdienern sind zurückgegangen. Den Rest des Beitrags lesen »

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The Cost of Overhyping Globalization

Posted by hkarner - 8. Oktober 2016

Photo of Daniel Gros

Daniel Gros

Daniel Gros is Director of the Brussels-based Center for European Policy Studies. He has worked for the International Monetary Fund, and served as an economic adviser to the European Commission, the European Parliament, and the French prime minister and finance minister. He is the editor of Economie Internationale and International Finance.

OCT 7, 2016 Project Syndicate

BRUSSELS – As the world’s financial elite converges on Washington, DC, for the annual meetings of the International Monetary Fund and the World Bank, they cannot escape yet another clarion call to reverse the retreat of globalization. Faltering trade, it is assumed, must be an adverse trend that needs to be addressed. But the assumption is simplistic, at best.

The problem lies in a lack of understanding of what drove trade growth over the last few decades. To be sure, there have been efforts to grasp the current slowdown. The IMF’s latest World Economic Outlook devotes an entire chapter to it.

But no significant new barriers to trade have been identified. Instead, the IMF declares, some three-quarters of the slowdown in trade growth is a result of “overall weakness in economic activity,” especially investment. The Fund also asserts that “the waning pace of trade liberalization and the recent uptick in protectionism” have played a role, though it is not quantifiable.

Even without establishing a clear understanding of what is driving current trends, however, the IMF report calls for action to revive the “virtuous cycle of trade and growth.” Clearly, faith in trade is very strong.

But faith is part of the problem. Blind faith in globalization led many to overhype it, creating impossible expectations for trade liberalization. When those expectations were not met, many people felt duped and rejected free trade.

This is not to say that there is no empirical case for trade liberalization. Dismantling trade barriers enables countries to start specializing in sectors in which they are more productive, which leads to higher growth and living standards for everyone. And, indeed, from the 1950s to the 1980s, the process of breaking down the high trade barriers that had been erected during World War II brought major gains.

But these gains petered out eventually. Economic theory implies that the gains from reducing trade barriers decline faster as those barriers become lower. So it should not have been surprising that, by the early 1990s, when tariffs and other trade barriers had already reached very low levels, the traditional benefits of trade liberalization had largely been exhausted. Eliminating what small barriers remained would not have had much impact.

What did have an impact was a two-decade-long commodity-price boom. High prices enabled major commodity exporters to import more and to pursue growth-enhancing policies at home – a boon to global growth. Moreover, because commodities account for a large share of world trade, rising prices boosted its total value.

Rather than acknowledge the role of commodity prices in bolstering both trade and growth in the early 2000s, most economists and politicians attributed those positive trends to trade-liberalization policies. In doing so, they reinforced the notion that “hyper-globalization” was the key to huge gains for everyone.

But the growth fueled by higher commodity prices, unlike that produced by the dismantling of trade barriers, caused a decline in living standards in the commodity-importing advanced countries, because it reduced the purchasing power of workers. No politician dared to make this distinction. So when advanced-country workers were squeezed economically, they concluded that globalization was the problem.

The role of commodities in the recent struggles of advanced-country workers is reflected in the differences between the experiences of those in the United States and Europe. Because the US produces much of its own oil and gas, the increase in commodity prices had less of an impact on the economy as a whole than in Europe.

But, for individual workers, the impact of rising commodity prices was larger in the US – not least because, in Europe, high sales taxes meant that even a doubling of crude oil prices produced only a modest increase in prices at the pump. Only oil producers, and a small number of workers in the sector, benefited from higher oil prices in the US.

Still, high-priced commodities – and, in particular, crude oil – created the illusion of wealth for the US, which, unlike European countries, did not feel the need to increase its manufacturing exports to balance its external accounts. So the US allowed its manufacturing sector to stagnate, as its external balance deteriorated. As a result, American workers got squeezed from two sides.

All of this happened at about the same time as the North American Free Trade Agreement was coming on stream. Though most studies show that net job losses due to NAFTA were limited, this timing created the strong impression that free-trade agreements – and globalization in general – was a raw deal for American workers.

When the global financial crisis erupted in 2008, destroying the value of houses that had kept those workers feeling wealthy, the true weight of the situation fell on US workers. This created an opening for demagogues like Republican presidential candidate Donald Trump to win support on promises of prosperity through protectionism.

Having misunderstood the causes of the extraordinary growth in trade in recent decades, political elites over-sold globalization. When one considers the gulf between their promises – explicit and otherwise – and the actual experience of many workers, the current backlash against trade openness should be no surprise.

But there is good news: if the decline in the volume of trade is due to lower commodity prices, it will largely benefit advanced-country workers. Perhaps this will be enough to ease the demand for unnecessary new trade barriers.

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When Globalization Eats Its Young

Posted by hkarner - 6. Oktober 2016

Photo of Harold James

Harold James

Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation. A specialist on German economic history and on globalization, he is a co-author of the new book The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, and Making the European Monetary Union.

OCT 5, 2016 Project Syndicate

PRINCETON – Evidence that globalization is reversing continues to pile up: trade and international capital flows are sluggish, and migration is increasingly being restricted. These trends emerged in the aftermath of the 2008 financial crisis, so they can’t be blamed on a new populist backlash against globalization. Rather, their source can be traced to national authorities’ failure to take the logic of globalization seriously.

In a year when the United Kingdom voted to “Brexit” from the European Union, and Republicans in the United States chose Donald Trump as their presidential candidate, anti-globalization populism does seem ubiquitous. But while it is tempting to see populism as a cause of global economic woes, the movement has, in fact, had only limited political successes so far.

After all, the world economy is not sputtering because Poland and Hungary have populist right-wing governments committed to reasserting national sovereignty. Left-wing populism, for its part, has even less to brag about: Fidel Castro is fading away in Cuba; Argentina is recovering from catastrophic mismanagement under the Néstor Kirchner and Cristina Fernández de Kirchner presidencies; and Venezuela’s economy has imploded under President Nicolás Maduro. Den Rest des Beitrags lesen »

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Das Ende der Globalisierung

Posted by hkarner - 4. Oktober 2016

Date: 03-10-2016

Die Gegner des freien Handels gewinnen weltweit Einfluss auf die Politik. Die Folgen werden schwerwiegend sein – gerade für die Exportnation Deutschland.

Eine Kolumne von Henrik Müller

Als Globalisierungsgegner war man lange in einer relativ bequemen Position. Man konnte die Auswüchse des internationalen Wettbewerbs thematisieren. Man konnte sich über Lohn-, Steuer- oder Währungsdumping aufregen und internationale Handelsabkommen wie TTIP, Ceta oder den USA-Asien-Pakt Trans-Pacific Partnership (TPP) ablehnen. Die Globalisierung ging trotzdem weiter.

Der internationale Austausch gedieh, Handelsströme wuchsen schneller als die Wirtschaft insgesamt, Kapitalverflechtungen nahmen zu. Die Globalisierungsgegner konnten darauf hoffen, einen Beitrag zur Verbesserung der Globalisierung zu leisten, ohne sie im Kern zu gefährden. Insofern stellten sie ein wertvolles politisches Gegengewicht zu den Interessen internationaler Konzerne dar. Den Rest des Beitrags lesen »

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