Global Economy and Finance Programme

The International Monetary Fund needs finances and governance that reflect the underlying balance in the world economy if it is to remain universal and effective.

The argument that the erosion of the dollar’s global status could benefit the US is gaining traction in Washington. That move would be a needless act of self-harm.

Only Europe can begin to fill the void left by the US’s withdrawal from its post-war global economic leadership role. The EU and UK should make this goal a shared priority.

With China’s large trade surplus likely to remain intact and the Trump administration aiming to turn the US trade deficit into a surplus, the world is facing a ‘clash of mercantilisms’.

In a whirlwind start, the new US president has shaken America’s executive branch, European security, the liberal international order and global economics. Chatham House experts analyse the impact – and what comes next.

To secure long-term growth, the government must resist the temptation to fight inflation by letting the naira strengthen against the dollar.

President Trump’s actions seem to indicate a hemispheric US foreign policy emerging. There is a bleak logic behind that approach.

Given the threat posed by President Trump’s trade strategy, the EU, CPTPP and China must work together to preserve and revitalize the WTO and other key elements of the world trade and investment system. 

Trump’s economic policies may prove surprisingly benign in the short term. But steps that undermine domestic US institutions and international alliances would do serious and lasting damage.

Putin’s government considers inflation an existential threat. But Trump’s preoccupation with China may prevent the US exploiting Russian weakness.

Although Trump favours a weaker exchange rate, his policies are likely to have the opposite effect. The risk is that the US dollar could become too strong, which is bad news for the global economy.

Traditional allies of the US need to find a way to work together on some global policy issues even when the US itself is not engaged. A ‘G6 plus’ group could provide an answer.

Beijing historically swings between stimulus and frugality. But Xi Jinping’s ambition for self-reliance will constrain any new efforts to boost the economy.

Plans for ambitious reform in Egypt, Turkey and Argentina could fold in the face of public unrest. A second Trump term may change how the IMF and World Bank respond.

Last week’s plenum was light on substance, but even if the CCP had been clearer about its intentions, we might still be none the wiser about the direction of policy.

Some investors in hydrocarbons may be assuming that governments will bail them out if climate-related transition risks crystallize.

Neither party is saying enough about international trade in their election proposals, with discussion of UK–EU trade a striking omission.

G7 leaders meeting in Italy are unlikely to prioritize discussion of public debt, which now exceeds post-war highs. This would be a mistake.

Far right parties’ vote share did not increase on the scale some expected. But in the long-term, their ideas may affect EU policy on migration, environment, security and enlargement.

Respected economists believe New Delhi’s priority should be developing the services sector. But geopolitical competition with China will keep manufacturing at the forefront.

Raising productivity growth is the only way the UK will be able to meet its domestic and international objectives over the long term.

The G7 must weigh the benefits of confiscation against potentially large but uncertain costs.

Conventional, publicly capitalized financial instruments are the only way to mobilize private finance on a very large scale.

While the global economy is showing signs of strong growth, public debt levels in emerging markets are rising at an alarming rate.

The UK’s new strategy highlights how clarity of purpose, careful calibration and flexibility can help ensure sanctions regimes are effective.

Egypt’s strategic position in the Middle East, its political importance to the US – and proximity to rich neighbours – has allowed it to secure much-needed financial resources.

Watch the keynote address from our 2024 Global Trade conference by The Rt Hon Kemi Badenoch MP, Secretary of State, Department for Business and Trade.

Yet again, a WTO ministerial is being criticized for producing little of substance. But the Organization provides an opportunity for powers like the US, China, EU and India to agree pragmatic ways forward.

Weakening the currency should be relatively straightforward. But the adverse reaction of China’s trading partners, past experience, and Xi Jinping’s ambitions for the renminbi could combine to prevent it.

Growth looks set to weaken this year, but authorities remain unable to deliver a large monetary stimulus and unwilling to deliver a large fiscal one.

Efforts to finance the global HIV response were the product of a unique era of collaborative thinking and partnerships. This research paper seeks to draw lessons for the benefit of future core global health priorities.

The ‘net zero’ transition will require a massive reallocation of private capital from high- to low-carbon assets in coming decades. Action by central banks, financial regulators and industry coalitions will be critical to this process.

Global economic and financial institutions have been ill equipped to date to support climate action. What reforms are realistically possible?

Global trade continues to face multiple challenges as the risks of deepening tensions between the US and China, along with those of an escalation of Russia’s war on Ukraine, weigh on economies.

A global approach is the only way to tackle debt distress in Africa. This will require strategic cooperation between China, the West and African nations.

The Trade and Technology Council (TTC) has become the main platform for US–EU trade and tech cooperation. But the US and the EU must turn ambitions into tangible outcomes if the TTC is to tackle significant global issues.

Europe and the US recognize that their policies and strategies on the Indo-Pacific need to be more coherent. Existing structures such as the G7 and the Quad could become key forums for enhanced cooperation.

This paper offers a public policy ‘toolkit’ for governments in the US and Europe to support firms in securing resilient and sustainable supply chains

Carefully designed demand and supply policies supported by international cooperation can help preserve the very trading arrangements needed to ensure reliable access to medical goods such as vaccines and PPE in an emergency.

The bank regulatory framework has so far proven effective in ensuring financial market stability during COVID-19. But the FSB’s review of lessons learnt will be crucial to the system’s future international coherence.

The pandemic has highlighted the persistent insecurity of informal sector work, and the need for governments and international financial institutions to collaborate in developing stronger social safety nets.

Emerging-market governments may struggle to service their foreign debt and raise capital domestically. An IMF early-warning framework and the use of GDP-linked bonds could help to prevent the next crisis.

Efforts to reform investor–state dispute settlement (ISDS) have focused on future investment treaties. A more effective approach would be to revisit the 3,000 existing treaties.

A combination of pre-existing and new measures have helped avert a systemic liquidity crisis to date. International cooperation and further policy innovation will be needed to ensure continued stability.

The collapse in economic activity caused by COVID-19 has prompted massive fiscal intervention in many countries. The next policy challenge will be to manage a smooth recovery.

A modernized and fully functioning WTO is more essential than ever. This paper makes the case for transatlantic cooperation as a necessary condition for reform.

This paper examines the governance problems in the monetary system and global trade and regulation. It then explores whether issues have arisen because the US has given up its dominant role, and if so how these might be rectified.

This paper looks at the challenges to address if a human rights impact assessment of trade agreements is to emerge as a robust and credible policy tool for states.

After five years of the W20, women and gender equality remain at the margin of the G20. There is a real risk of the W20 representing a one-off territorial gain at a frontier that could easily be pushed back again.