NoFreeLunch

The countries on the periphery of Europe are now reaping the benefits of rapid growth due to borrowing in the pre-crisis years. The US and Japan are considered to be next, but they are reserve currency countries, so maybe they will still get by? Or will the sharply worsening demographics finish them off? In any case, interest rates on treasury bonds began to rise at the end of the year, despite quantitative easing. And, as McKinsey argues, this is a permanent process associated with the growth of global demand for investment due to accelerated growth in developing countries and a decrease in the supply of savings due to numerous demographic problems. However, there is a positive side to these events. “What does not kill us makes us stronger” - in this case, this phrase applies to the Eurozone. Indeed, if it does not collapse, it will become stronger due to improved governance, both by individual countries and by the union of countries as a whole, including through the creation of new mechanisms for mutual support in a crisis and improved control over compliance with macroeconomic discipline.

Decoupling is not a myth

Initially, decoupling was understood as the ability of developing countries to withstand the crisis in developed countries and actively develop, thereby supporting growth in the developed world. The crisis of confidence that erupted after the bankruptcy of Lehman Brothers seemed to destroy this theory. However, the further we go, the more obvious its correctness becomes: in developed countries (except, perhaps, Germany and Holland) there is a protracted stagnation, and developing countries are growing in accordance with their long-term potential, thereby creating the foundations for developed countries, including those same Germany and Holland. Moreover, the development of financial markets in the developing world has accelerated. Hong Kong is becoming the world's leading venue: this year, the volume of IPOs on this market amounted to $52.3 billion, while in New York it was only $42 billion. In China itself, the volume of IPOs on all exchanges almost reached $67 billion. And the yuan is quickly gaining ground as a world currency: this year, trading transactions in yuan were allowed, and their volume immediately grew to $340 billion. The recently emerged market for yuan-denominated bonds is also growing rapidly. Financial markets in developed countries are either trying to digest bad debts accumulated in previous years, or are preparing for tighter regulation. The initial G20 financial reform agenda looked like a balanced set of correct principles, but in practice it has so far resulted only in tightening capital standards.

It is difficult to reach an agreement if interests do not coincide

This is a lesson for the G20, whose effectiveness has declined sharply since the end of the acute phase of the crisis. In the fall of 2008 - spring of 2009, all countries were in the same boat, so decisions were made and implemented quickly and in a fairly coordinated manner. But as soon as the uneven recovery began, the contradictions between countries came to the surface again. This is especially evident in the case of balancing global imbalances - everyone is waiting for more decisive steps from the other side, and is not ready to take countermeasures. America is waiting for China to revalue the yuan, China is waiting for the US to stop using monetary stimulus and stabilize the budget, etc. Trade protectionism, there is hope, will not flare up on this basis, but the growth of protectionism in the capital markets is already evident.

Politics cannot be neglected

This is a lesson for Barack Obama, who clearly lost the initiative. As a result, the Republicans won the midterm elections under the slogans of the Tea Party (this was the name of the events in Boston in the late 18th century that served as a pretext for the war for independence. Then American revolutionaries sank English tea, which was subject to an increased tax). However, many economists believe that Obama has no chance in any case: with such a level of unemployment, no president has ever managed to be re-elected for a second term.

The year in review for the global economy