The 21st century economic consensus: rethinking policy and strategy

The liberal economic model, based on markets, market-supporting institutions and international integration, is embattled on two fronts. First, in many advanced countries, it is viewed as having underdelivered on its promise to lift all boats: inclusive growth. Instead, it is increasingly viewed as an elite project that does not do much for a large segment of the population. Second, economic nationalism in countries like China and and the United States. The latter has recently abandoned its post-World-War II role as the benevolent hegemon of the West, and is now dismantling important elements of the rules-based international order that it previously helped to create.

How should Europe’s economic model evolve to meet these challenges? How can it both re-ignite inclusive growth and gain strategic autonomy? The discussion was based on the two recent publications: The London Consensus: Economic Principles for the 21st Century, edited by Tim Besley, Irene Bucelli and Andrés Velasco of the LSE school of public policy, and Geopolitical Shifts and Their Economic Impacts on Europe: Short-Term Risks, Medium-Term Scenarios, and Policy Choices, by Bruegel’s André Sapir, Jacob Kirkegaard and Jeromin Zettelmeyer.