The Global Economic System: Structural Trends

Abstract

The article presents the results of the author’s research of trends and related problems in the global economy, showing signs of a potential recession and persisting future uncertainties, which cause the increasing demand in enhancing global management tools capable to reduce the uncertainties. On the other hand, there emerges an economic nationalism with the intrinsic protectionism of governments, launching regulatory schemes safeguarding national markets against manifestations of the global- market cosmopolitanism. This context gives rise to the processes referred to a trade war with global traits. It is demonstrated that trade wars hamper the dynamics of economic growth. The latest 200 years saw a higher pace of global trade compared with GDP, enabling the economy to break national borders. A slowdown of trade in comparison with GDP is recorded for the second time over the 200-year history. It first occurred in late 19th – early 20th century and featured tariff barriers stably increased by national governments. Now the global trade, like in the earlier time, is losing the role of an economic driver. At the European continent, signs of economic nationalism amid comparatively low competitiveness of the European economy occur in spite of the administrative bodies operating at EU level. To ensure economic development and growth, EU needs to carry out institutional reforms aiming to consolidate EU through consensus in their implementation based on the multilateral approach. This calls for the enhancement of institutional capacities of EU bodies with the increasing trust in them by member countries, on the one hand, and the expansion of opportunities for the emergence of a leader capable to achieve integration of European markets along with resolving the dilemma of unity and realization of development goals. An integration-driving force in achieving this unity can be the industrial policy in the sectors where the market, including the European one, fails, along with the open-border policy. The latter, pushing up massive migration, helps reduce social tensions, given the inefficiency of the present-day upward social mobility. The expected new wave of technological expansion will have tougher pressures on the workforce, because labor displacement in some sectors and job creation in others has a time-lagged rather than simultaneous effect, which increases stimuli for migration.