Economics & Global Affairs

For many, integrating “decarbonization” into public policy, corporate and financial strategies has become a requirement, not an option — yet, what happens when the critical link between climate stability and decarbonization breaks?

Joseph S. Nye writes that If there is one person other than Vladimir Putin who can end Russia's war in Ukraine, it is Chinese President Xi Jinping. But Xi has so far remained on the sidelines and is likely to stay there, owing to various domestic political vulnerabilities and his own lack of courage and imagination.

Capital Choices analyzes the creation of different SWFs from a comparative political economy perspective, arguing that different state-society structures at the sectoral level are the drivers for SWF variation. Juergen Braunstein focuses on the early formation period of SWFs, a critical but little understood area given the high levels of political sensitivity and lack of transparency that surround SWF creation. Braunstein’s novel analytical framework provides practical lessons for the business and finance organizations and policymakers of countries that have created, or are planning to create, SWFs.

Will China succeed in what some call its grand strategy of displacing American power? Whichever scenario emerges also depends on the strategy the US chooses in response, rites Joseph Nye.

Joseph Nye  discusses the following: Why the United States must work with China on global issues such as climate change, pandemics, and other transnational concerns, despite rivalry between the two countries; the "three-dimensional chess game" between the U.S. and China, with military, economic, and ecological boards; the importance of soft power; and differences from the U.S. relationship with the Soviet Union.

As economies begin to orient themselves towards recovery and growth in a post-COVID-19 era, they will first need to disentangle themselves from their prior bedfellows, the state, whose courtship was necessary for survival during the pandemic.  Such bedfellow relationships have become increasingly common as government intervention is urgently needed for economic stabilization. Governments have also embraced their new role with vigor. According to the IMF, as of April 2020, countries have committed around $8 trillion to combat the pandemic and to remedy its ill effects on economies and societies. Decisions about how this money will be spent will undoubtedly recalibrate the logic of capitalism for years to come. 

Juergen Braunstein and Sachin Silva argue that sovereign wealth funds may be central to governments' efforts to balance public responsibility with private interests in post-pandemic economies.

As the divergent experiences of the US and South Korea show, testing can be the difference between disease containment and catastrophe. Rather than relying on national governments to ensure the rapid development, production, and deployment of diagnostics during outbreaks, the world needs a global coordinating platform.

The world is on the cusp of a geopolitical reset. The global pandemic could well undermine international institutions, reinforce nationalism and spur de-globalization. But far-sighted leadership could also rekindle cooperation, glimmers of which appeared in the G-20’s offer of debt relief for some of the world’s poorest countries, a joint plea from more than 200 former national leaders for a more coordinated pandemic response and an unprecedented multinational pact to arrest the crash in oil markets.  

Today’s economic crisis leaves us with an unsettling and perplexing regret. Why weren’t financial portfolios already adjusted for risks that stem from health events such as pandemics? After all, financial portfolios are adjusted for liquidity risks, market risks, credit risks, and even operational and political risks.