Crumbling Global Order: Wall Street Journal

Major shifts in world systems can result in global downturns, argues Greg Ip for the Wall Street Journal. This was the case for the end of the era of cheap oil but not the advent of the internet. Increasing resistance to globalization and open markets fueled by nationalism and populism – and a general decline in diplomacy with Brexit, the US-China and South Korea-Japan trade wars, divisions in the European Union, shifting supply chains and currency disruptions – add challenges for businesses and investors. Central banks may lack adequate tools to battle a deep recession even as national leaders manipulate and disregard traditional economic norms. “Businesses and investors, unsure of what if any rules will govern international commerce, are retreating from risky investments,” Ip writes. “Globalization has suffered temporary setbacks in past decades. This time feels different. The U.S., which led in creating global institutions such as the World Trade Organization, now leads in crippling them.” National leaders, intent on boosting their own economies, are in no mood for compromise or cooperation. – YaleGlobal