S. Afontsev (email@example.com),
Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation
Abstract. After the crisis of 2008–2009, dynamics and structural characteristics of the global economy experienced profound changes. Instead of shifting to a ‘New Normal’ of any kind, it presented both developed and developing economies with a set of strategic options involving technological, institutional, and economic policy trade-offs. Most resourceand technology-related ‘forks in the road’ are relatively growth-friendly, as the choice among the available strategic alternatives can rely on efficiency-maximizing economic calculus (although in some cases, as with the labor-saving technological change, social costs can be rather sensitive). This applies also to the dynamics of institutional change, with different economic and social institutions having proved their compatibility with positive GDP growth. On the contrary, economic policy trade-offs are much more challenging, as efficiency-improving policy reforms often bring opposition by vested interests and/or electoral risks. As for global economic governance, these risks are complemented with nationalist temptations inviting political decision makers to sacrifice global norms for country-specific benefits. In this sense, recent trends in global trade are especially warning, as proliferation of trade barriers can further reduce growth in global trade and downgrade the role of export demand as the engine of global development. Thus far, both markets and most experts considered new US protectionist initiatives as elements of the bargaining strategy used by the Trump administration, which will more likely result in concessions by the affected country partners rather than in retaliatory measures. However, the scenario of full-fledged trade wars should not be ruled out. The history of the global economy presents numerous cases when political ambitions and conflicting trading interests generate outcomes leaving all the parties worse off. Preventing the collapse of the existing regimes and institutions of global economic governance appears one of the key factors responsible for keeping growth rates of global GDP above 3 per cent in short- and medium-run perspective.
Keywords: world economy, economic growth, GDP, global trade, foreign direct investment, global competitiveness, digital economy, global economic governance, protectionism, trade wars
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