Book Review: Dance of the Trillions by David Lubin – IMF Finance & Development Magazine | March 2019
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- Book Review: Dance of the Trillions by David Lubin – IMF Finance & Development Magazine | March 2019
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Bibliographic details
- Authors: Robin Brooks
- Published: March 1, 2019
Review summary
- Reviewer: Robin Brooks, managing director and chief economist, Institute of International Finance.
- Format and publication details from the source: Dance of the Trillions: Developing Countries and Global Finance; Brookings Institution Press/Chatham House, Washington, DC, and London, 2018, 154 pp., $34.99.
- The review characterizes the book as an all-encompassing and well-written tracing of global capital flows to emerging market and developing economies from the 1970s to today.
Main findings in the book as highlighted by the review
- Traces the ebb and flow of global capital to emerging market and developing economies from the 1970s to today.
- Emphasizes the central role of US monetary policy as one of the principal drivers of capital flow cycles to emerging markets.
- Highlights the “curse of hot money” for many emerging markets.
- Argues that managing exchange rates often produces the opposite of intended stability.
Challenges for emerging markets identified
- Shift toward protectionism in some advanced economies, rooted in perceptions that globalization benefited emerging markets at the expense of low-skilled labor in the advanced world.
- Technological progress reducing demand for low-skilled labor; the 3D printing of running shoes is given as an example of production returning from emerging markets to advanced economies owing to diminishing importance of wage differences.
- Overhang from a decade of extraordinary monetary stimulus in the world’s three leading economies, which produced record capital flows to emerging markets and record vulnerabilities.
China and geopolitics
- The central question: the role China will play in the world economy in the years ahead.
- Recent trade tensions between the United States and China are described as symptomatic of persistent imbalances and a reluctance to address them on all sides.
- Notes a separate set of issues around moving from a US-centric unipolar world to a more bipolar or multipolar world, and implications for China and the rest of the developing world.
- Points to mixed reactions to China’s Belt and Road Initiative, especially concerns around debt and lack of knowledge transfer in recipient countries, raising questions about China’s business model relative to the Washington Consensus.
Tone and appraisal
- The reviewer expresses long-standing admiration for David Lubin as a leading emerging market strategist and credits the book with providing insight and perspective during turbulent market periods (example cited: 2018 emerging market sell-off).
- The book is positioned as particularly pertinent at the tail end of a decade of extraordinary monetary stimulus that is gradually being unwound.
Robin Brooks, F&D Magazine, March 2019
Content in this bundle
- أوقات عصيبة
- Book review: Dance of the Trillions — Robin Brooks
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