##to ’ s inability to correct these distortions. yet it should be stressed that the us shift towards bilateralism in international relations has significant consequences, beyond merely trade considerations, that stretch to the struggle for leadership of technological developments and, more generally, to an effort to sustain a privileged position in the economic and political arenas. the united states is not an isolated case in the shift. and undoubtedly bilateralism, linked in part to free market economy constraints, has gained weight recently in how other nations operate globally. in any event, as the author points out, what is true is that the shift to protectionist - style policies – commercially and geopolitically – threatens to break the multilateral global governance arrangements in force. paradoxically, the united states had led these arrangements over recent decades. now, there is a consequent danger for global prosperity. the redistribution of power among a growing number of players entails the replacement of the multilateral international cooperation arrangements with a new, more fragmented, decentralised and informal system as regards decision - making, in which bilateral and regional solutions trump multilateral agreements. another characteristic feature of globalisation recently has been the onrush of the digital revolution and the roll - out of new communication and information technologies. these are driving radical changes in the economy, in society, in how we understand labour relations and in investment and consumption decisions. as the author indicates in the book, we are yet to fully discern the possibilities that artificial intelligence, robotisation and quantum computing can offer in the different facets of our lives. professor ontiveros also emphasises the risks and threats the application of these new technologies entails, e. g. the control of individuals, the invasion of privacy, the concentration of market power in the big tech companies, inequality and the exclusion of those who fail to adapt. adding to globalisation and technical change is the demographic challenge. this poses fundamental challenges to growth, productivity and the sustainability of public finances in numerous economies. migratory problems and those arising from unstoppable urbanisation have also become priorities given their implications for economic, social and environmental development. with all these ingredients, the author ’ s main line of argument in the book is that globalisation, bound up with intense technological changes and the deregulation of economies, has contributed to generating uneven economic growth, a prevalence of the financial over the real economy, a concentration of market power in major corporations ( which has stifled competition ) and a deterioration in the environment.

nominal domestic anchor, such as a money supply or inflation target ; and it will need an institutional structure – typically an independent central bank – to reinforce the credibility of the commitment to that nominal anchor. at the other extreme a fixed rate regime may be more attractive to smaller, more open, economies or where a credible domestic macro - economic framework is difficult to establish, for example, for historical or political reasons. but in this case it is crucial to recognise that domestic policy must be totally and unreservedly committed to maintaining the fixed exchange rate. it is an extremely demanding regime but one which can work well – as we have seen in hong kong – where there is a high degree of supply - side flexibility to act as an alternative external shock absorber. it has become increasingly fashionable recently to exclude anything between these two extreme positions – an actively managed float or a pegged rate regime – as an unviable middle ground. it is argued essentially that because they do not exert a sufficient discipline on policy in either direction, or therefore represent a sufficiently clear policy framework, they tend to intensify market tensions when a divergence between the policy needs of domestic and external stability does in fact arise. i am reluctant to accept that so - called “ corner ” view in any absolute sense. when tension does arise between external and domestic objectives, you cannot avoid the impact on domestic policy altogether even with a floating exchange rate regime – as i explained in the context of our own recent experience. it may help to reduce that tension to attempt to manage the float to some degree, by supporting appropriate domestic policy action with exchange market intervention, though i agree that such intervention may serve as little more than a signal where a currency is internationally widely traded and held. similarly there can, i believe, be circumstances in which domestic discipline may be reinforced by an exchange rate peg, but it is vital in that case that the authorities should identify a clear exit strategy before serious tensions are allowed to emerge. that – i know from our own experience – is much easier said than done! mr chairman, these dilemmas are certainly not new. but clearly they are liable to be accentuated by the massive increase in global capital flows over recent years, which has not only complicated the choice between alternative possible exchange rate regimes but also made the management of any of those regimes substantially more difficult. so there is a further question we need to address which is whether there is anything we can do to reduce the volatility of these massive capital flows