Worry not. Worry. Worry not.

by | Feb 4, 2009


The EU may be planning to sue over the US’s Buy American nonsense, but in the FT, Lex is confident that globalization cannot easily be put into reverse:

Economic nationalism, it is argued, will tip the world into a Great Depression, just as America’s Smoot-Hawley Act did 79 years ago. This is a horrifying but, frankly, also a distant prospect. The disaggregation of global supply chains, the source of the huge efficiencies that companies pass on to consumers, will not be easily undone.

Maybe so… But Willem Buiter is much less sanguine:

We can go down in history as the generation that created the Great Depression of the Noughties.  Just keep on beating the protectionist drums.  Keep on the footdragging that prevents effective qualitative and quantitative monetary policy easing in the Eurozone and the UK.  And go ahead with unsustainable fiscal stimuli in the US, the UK and elsewhere that will spook markets, push up long-term interest rates and raise the spectre of sovereign default by countries not belonging to the group of usual suspects.  Yes we can!  I hope we won’t.

Author

  • David Steven is a senior fellow at New York University, where he founded the Global Partnership to End Violence against Children and the Pathfinders for Peaceful, Just and Inclusive Societies, a multi-stakeholder partnership to deliver the SDG targets for preventing all forms of violence, strengthening governance, and promoting justice and inclusion. He was lead author for the ministerial Task Force on Justice for All and senior external adviser for the UN-World Bank flagship study on prevention, Pathways for Peace. He is a former senior fellow at the Brookings Institution and co-author of The Risk Pivot: Great Powers, International Security, and the Energy Revolution (Brookings Institution Press, 2014). In 2001, he helped develop and launch the UK’s network of climate diplomats. David lives in and works from Pisa, Italy.


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