Who Should Lead the Global Economy?

The major economies of the United States, the European Union and China all have potential for global leadership. “The bigger an economy, the greater its systemic importance, and the more leverage its political representatives have in international decision-making,” explain Harold James and Domenico Lombardi, with the Centre for International Governance Innovation. The United States, the eurozone and China are each large enough to lead globally. Of course, there is concern about US deficits and political gridlock; Europe’s lack of a single debt instrument like the US Treasury bill; and China’s “absence of currency convertibility” and “weak financial supervisory framework.” The two writers outline the qualifications and preparation for global economic leadership: systemic importance in commercial, monetary and financial terms; ability to connect and shape economies; financial markets that offer liquidity and safety; and a legal system with regulations that offer justice and some certainty for companies and investors around the globe. - YaleGlobal