Many argue that the combined effects of the 2008 global financial crisis, the COVID-19 pandemic, Sino-American decoupling, and Russia’s war against Ukraine have dealt an irreversible blow to three decades of open trade and burgeoning supply chains. How should policymakers and businesses respond to the apparent demise of globalization, and what new paradigm might replace it?
PRINCETON – Europe’s debt crisis has piqued Europeans’ interest in American precedents for federal finance. For many, Alexander Hamilton has become a contemporary hero. Perhaps one day his face should appear on the €10 banknote.
Specifically, for European states groaning under unbearable debt burdens, Hamilton’s negotiation in 1790 of the new federal government’s assumption of the states’ large debts looks like a tempting model. Indeed, after Thomas Sargent won the Nobel Prize in Economics last year, he cited it as a precedent in his acceptance speech.
Hamilton argued – against James Madison and Thomas Jefferson – that the debts accumulated by the states during the War of Independence should be assumed by the federation. There were two sides to his case, one practical, the other philosophical.
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