The great trade decline during the Depression marked the end of an era of global trade. We have not seen the same decline in trade flows since 2008. By the end of 2009, trade flows popped higher after declining sharply in 2008, yet a closer look will show that there has been a significant decline in cross border capital flows which is the river of trade in the current global economy. The great era of globalization in the last 25 years has been driven as much by capital flows as trade.
Global financial assets have grown by only 1.9% since 2008. Financing has become more localized. If capital is the oil of commerce, we are seeing a sticky sludge that will reduce the movement of goods and services across borders. If capital flows decline the modern link between countries will also decline.
Global financial assets have grown by only 1.9% since 2008. Financing has become more localized. If capital is the oil of commerce, we are seeing a sticky sludge that will reduce the movement of goods and services across borders. If capital flows decline the modern link between countries will also decline.
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