Finance and Politics: The end justify the means
The expected transformations such as reinstating pro-globalization policies after four years of Trump’s anti-globalization policies and applications of quantitative easing will have a considerable impact on the fiscal and monetary policies of the other countries, especially those with developing economies. Similar effects will also be experienced by the advanced economies, albeit at a lesser rate. Therefore, the spillover effect of the recent US election into the global financial institutions and markets cannot be underestimated.
Even if we accept that China is the strongest economic power today, as claimed by some observers, it will not be for China to determine global financial and economic policies of the rest of the world. Economic leadership is of undeniable importance but it is only one part of the game. The US is likely to retain its global political and financial supremacy but not its economic hegemony. Thus, America serves as volatility gauge for the existing global financial and economic systems, and as such, the expected disintegration of the powerful US financial and political institutions is not as imminent as anticipated. If such a complete disintegration was indeed to materialize, the result would be another Great Depression.
Asst. Prof. Dr. Lukman A. OLOROGUN
