Trade and financial flows in the era of “post-globalisation”: a European perspective

The era of international trade expansion and liberalisation has seemingly come to a halt. World trade is no longer growing at the pace it did before 2008 and the participation in global value chains (GVCs) – which increased rapidly from 1990 to 2007 – has stalled and in some cases even reversed. These developments are occurring in a context in which tariff and non-tariff barriers have become an ever more frequent reality, with the number of harmful trade interventions on the rise since 2012 and strongly accelerating since 2017. On the financial side, a “new normal” has been emerging with respect to the size and composition of capital flows, with the demand for safe assets reaching record levels. On the other hand, the activities of multinational enterprises (MNEs) and special purpose entities (SPEs) have further expanded, making it increasingly difficult to interpret traditional national accounts statistics and cross-border financial positions.

Owing to their high openness and interconnectedness, euro area/EU economies have been particularly exposed to these “post-globalisation” trends.

This conference will address a range of questions raised by these ongoing transformations. How will trade, financial flows and, ultimately, growth models be affected in the euro area/EU? In which ways will changing trade conditions and growing protectionism impact productivity, real convergence and welfare in the longer run? How are firms adjusting production processes and business models? How similar are the effects on different euro area/EU economies, given different levels of participation and varying positioning in GVCs and in the wider global financial system? What are the most recent advancements in the literature as regards understanding the implications of MNE/SPE activities? Are we witnessing permanent changes or just temporary shocks that may at least partly be reversed? And, last but not least, what are the relevant policy implications?