Past Event

The 13th World Knowledge Forum – The Great Breakthrough: New Solutions for the Global Crisis

Bruegel will co-organise a session in this year’s World Knowledge Forum – you can see the details of the session below. Panel title: "The global consequences of deleveraging" Co-organizers: Asian Development Bank and Bruegel Date and time: October 9, 17:00–18:20 Venue: Grand Hall Scope: The session will cover the various dimensions of deleveraging in the […]

Date: Oct 8 - Topic: Global economy and trade

Bruegel will co-organise a session in this year’s World Knowledge Forum – you can see the details of the session below.

Panel title: "The global consequences of deleveraging"

Co-organizers: Asian Development Bank and Bruegel

Date and time: October 9, 17:00–18:20

Venue: Grand Hall

Scope: The session will cover the various dimensions of deleveraging in the US, Europe, and Japan, and address its implications for emerging countries.

Moderator: Phil Smith, General Manager of Reuters News, North Asia

Panelists:

  • Jean-Louis Beffa, Honorary Chairman, Compagnie de Saint-Gobain
  • Erik Berglof, Chief Economist, European Bank for Reconstruction and
    Development
  • Mitsuhiro Fukao, Professor of Economics, Keio University
  • Jean Pisani-Ferry, Director, Bruegel
  • Changyong Rhee, Chief Economist, Asian Development Bank
  • Jorge Sicilia, Chief Economist, Banco Bilbao Vizcaya Argentaria SA

Synopsis:

The European debt crisis that has dominated policy discussions in recent times is a particularly acute aspect of a broader syndrome: by and large, all major advanced economies are confronted by a major deleveraging problem that affects in various proportions governments, households, and the financial sector. The implementation of Basel III in January 2013 is even
likely to exacerbate this deleveraging problem. In Europe the problem is compounded by systemic flaws in the functioning of the currency area but it is not of larger magnitude than elsewhere.
With the major advanced economies simultaneously going through the deleveraging process, there will undoubtedly be implications on long-term global growth prospects. Inevitably, there will be spillovers to emerging economies, not only in terms of slower growth but also in terms of capital flows, exchange rates, and financial market stability. Furthermore emerging countries themselves are not immune to excess leverage. Recessions can cause asset prices to decline, affecting the soundness of the banking sector even in emerging markets, especially those with large holdings of real estate and household debt.
There have also been differences of opinion about how the ensuing crises have been handled in these economies and the appropriate roles of monetary and fiscal policies in resolving the crises.
To assess these issues, this session will consider the following questions:

  • Private vs. public deleveraging, real vs. financial deleveraging: When it affects more than one category of agents, as is the case in several countries, what is the desirable sequencing?
  • Impact of Basel III on deleveraging: What are the possible consequences of Basel III on advanced countries’ deleveraging? What are the implications for banks’ riskier businesses, such as financing of infrastructure projects in developing countries? What are the impacts for trade financing?
  • The extent of deleveraging: How much deleveraging have advanced economies achieved? How much more needs to be done and over what time frame?
  • The balance between deleveraging and growth: What policies should advanced economies adopt to support economic recovery while deleveraging (i.e., reducing debt and stabilizing financial markets)?
  • The implications of deleveraging: What does the deleveraging processes in advanced economies mean for themselves and for emerging economies?
  • Lessons from deleveraging: How could emerging economies avoid the spillover effects of deleveraging in advanced economies? How could they secure the soundness of their banking sectors while advanced countries are deleveraging?
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External Publication

Global Economic Resilience: Building Forward Better

A roadmap for systemic economic reform calling for step-change in global economic governance to increase resilience and build forward better from economic shocks, prepared for the G7 Advisory Panel on Economic Resilience.

By: Thomas Wieser Topic: Global economy and trade, Macroeconomic policy Date: October 14, 2021
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Podcast

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Will ‘common prosperity’ address China’s inequality?

Why is China reviving this old mantra?

By: The Sound of Economics Topic: Global economy and trade Date: October 13, 2021
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Opinion

European governance

The inconsistency in global strategic relations

All of this talk on strategic retrenchment and autonomy is the language of escalation, not of appeasement and collaboration.

By: Maria Demertzis Topic: European governance, Global economy and trade Date: October 13, 2021
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Opinion

Xi’s pledge on financing coal plants overseas misses point

China’s domestic installation of coal-fired power plants continues at great pace.

By: Alicia García-Herrero and Simone Tagliapietra Topic: Global economy and trade, Green economy Date: October 7, 2021
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Blog Post

European governance

Pandemic prevention: avoiding another cycle of ‘panic and neglect’

Agreement is needed at international level on mechanisms to ensure better preparedness for the next pandemic.

By: Anne Bucher Topic: European governance, Global economy and trade Date: October 7, 2021
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Opinion

Will China use climate change as a bargaining chip?

Beijing shows signs of changing tactics ahead of the COP26 conference.

By: Alicia García-Herrero and Simone Tagliapietra Topic: Global economy and trade, Green economy Date: October 6, 2021
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External Publication

A world recovery fund to overcome developing countries’ post-covid debt woes?

Proposal to set up a World Recovery Fund (WRF), aimed at addressing some of the key problems with the design of the DSSI and more generally the existing international financial architecture for dealing with debt problems in the developing world.

By: Alicia García-Herrero Topic: Global economy and trade Date: October 6, 2021
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Opinion

The geopolitical conquest of economics

Although economics and geopolitics have never been completely separate domains, international economic relations were shaped for 70 years by their own rules. But the rise of China and its growing rivalry with the United States have brought this era to an end.

By: Jean Pisani-Ferry Topic: Global economy and trade Date: October 4, 2021
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Opinion

What Evergrande signals about China's economic future

Under Xi Jinping's new economic agenda 'common prosperity', China is cracking down on indebted real estate developers like Evergrande.

By: Alicia García-Herrero Topic: Global economy and trade Date: September 30, 2021
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Blog Post

German elections: seizing the moral and economic opportunity of global health security

The new German government should play its part in global health security and preparedness.

By: Amanda Glassman and Guntram B. Wolff Topic: Global economy and trade Date: September 24, 2021
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Opinion

Europe doesn’t need a ‘Mega-Fab’

Europe should defend its existing dominance in equipment manufacturing for semiconductors and invest in chip design instead of luring high-end fabrication to its shores.

By: Niclas Poitiers Topic: Global economy and trade Date: September 22, 2021
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External Publication

Investing in China: myths and realities

Concerns are real, but the country fares as well as peers at similar levels of development. Analysis published in fDi Intelligence.

By: Uri Dadush and Pauline Weil Topic: Global economy and trade Date: September 20, 2021
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