Is there more that the G20 can do to restore trade and economic growth and, if so, what could the T20 think tanks do to help? I would suggest that T20 think tanks could help by enlarging the analysis in two ways: Look beyond trade We must first look past trade to discern what factors may be shortening global value chains (GVCs) and slowing trade growth. Since 2008 central banks have been implementing very loose monetary policies, including by providing financing at a loss (employing negative interest rates). Interest rates have never been so low. The longest records on interest rates are those from the Netherlands, which go back 500 years and clearly demonstrate that interest rates are currently at record low levels. Ultra-low interest rates could be entirely justified for reasons that I do not intend to address in this article, but subsidising capital can only invite industries to replace labour for capital. If, in the 90s, trade growth outpaced GDP growth by a factor of 2.5 and, in the first years of this century (up to the crisis), trade growth was still outpacing output by a factor of 2.0, it was to a large extent because manufacturing industries...
Written by Hector Rogelio Torres