For three decades, financial globalization had seemed inevitable, until the 2008 crisis exposed the dangers, with the globalized financial system’s intricate web of connections becoming a conduit for contagion. Cross-border capital flows abruptly collapsed, and, almost five years later, they remain 60% below their pre-crisis peak.
WASHINGTON, DC – For three decades, financial globalization had seemed inevitable. New information technologies made it possible to conduct transactions halfway around the world in the blink of an eye. Savers gained the ability to diversify, while the largest borrowers could tap global pools of capital. As national financial markets grew more intertwined, cross-border capital flows rose from $0.5 trillion in 1980 to a peak of $11.8 trillion in 2007.
But the 2008 crisis exposed the dangers, with the globalized financial system’s intricate web of connections becoming a conduit for contagion. Cross-border capital flows abruptly collapsed. Almost five years later, they remain 60% below their pre-crisis peak.
This pullback in cross-border activity has been accompanied by muted growth in global financial assets (despite the recent rallies in stock markets around the world). Global financial assets have grown by just 1.9% annually since the crisis, down from 7.9% average annual growth from 1990 to 2007.
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In the longer term, oil and gas prices look set to rise unless investment picks up sharply, which seems unlikely given current policy guidance. Giant waves of supply and demand shocks will likely continue to roil energy markets and the global economy.
predicts further waves of supply and demand shocks in global oil and gas markets.
The American public has been alarmed and aroused by the US Supreme Court's growing extremism. But voters need to recognize the Court's radical majority for what it is: part of a carefully laid plan to turn the US into a repressive regime.
fears that the radicalization of the US Supreme Court is part of a larger plan to create a repressive regime.
Volodymyr Rafeyenko interviewed by Marci Shore
about the politics of language and literature, and the experience of being a refugee in one’s own country.
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WASHINGTON, DC – For three decades, financial globalization had seemed inevitable. New information technologies made it possible to conduct transactions halfway around the world in the blink of an eye. Savers gained the ability to diversify, while the largest borrowers could tap global pools of capital. As national financial markets grew more intertwined, cross-border capital flows rose from $0.5 trillion in 1980 to a peak of $11.8 trillion in 2007.
But the 2008 crisis exposed the dangers, with the globalized financial system’s intricate web of connections becoming a conduit for contagion. Cross-border capital flows abruptly collapsed. Almost five years later, they remain 60% below their pre-crisis peak.
This pullback in cross-border activity has been accompanied by muted growth in global financial assets (despite the recent rallies in stock markets around the world). Global financial assets have grown by just 1.9% annually since the crisis, down from 7.9% average annual growth from 1990 to 2007.
To continue reading, register now.
As a registered user, you can enjoy more PS content every month – for free.
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