Globalization Is Changing, Not Going Into Reverse

Globalization can't be expected to move at an even pace. Some aspects of globalization like trade growth and capital flows are slowing, explains Minouche Shafik for Financial Times, but others like communications are growing. She is a deputy governor of the Bank of England. Shafik adds that regional agreements are emerging in trade and financial areas because of mistrust of global approaches, and that can create imbalances. “For example, regional financial institutions now have, in aggregate, more funding at their disposal than multilateral institutions, even though risks are more efficiently pooled at the level of the global safety net,” she writes. Shafik recommends that policymakers must determine if the new financial volatility is sustainable and widespread reforms could prevent spillover effects in an integrated global economy. She concludes that benefits must be distributed fairly, with downside risks well managed, or public support for globalization will disintegrate. – YaleGlobal