magistralis delivered on the occasion of the conferral of an honorary degree in juridical sciences in banking and finance by the university of roma tre, rome, 23 april 2024. export quotas on gallium on the one hand, and limitations on technological transfers on the other, are in fact related. see h. ziady and x. xu, ‘ china hits back in the chip war, imposing export curbs on crucial raw materials ’, cnn, 3 july 2023. m. bottone, m. mancini, a. boffelli, d. pegoraro, a. kutten, i. balteanu and j. quintana, ‘ sourcing governance and de - risking strategies in europe : a comparative study of germany, italy and spain ’, banca d ’ italia, questioni di economia e finanza ( occasional papers ), 880, 2024 ; centro studi confindustria, ‘ catene di fornitura tra nuova globalizzazione e autonomia strategica ’, confindustria servizi, 2023. imf, ‘ world economic outlook. a rocky recovery ’, april 2023. i. balteanu, m. bottone, a. fernandez - cerezo, d. ioannou, a. kutten, m. mancini, and r. morris, ‘ european firms facing geopolitical risk : evidence from recent eurosystem surveys ’, voxeu column, 18 may 2024. f. p. conteduca, s. giglioli, c. giordano, m. mancini and l. panon, ‘ trade fragmentation unveiled : five facts on the reconfiguration of global, us and eu trade ’, banca d ’ italia, questioni di economia e finanza ( occasional papers ), 881, 2024. other forces are also pushing towards greater fragmentation. in several advanced countries, critics argue that – by embracing globalization – democratic countries have given up some of their autonomy in implementing national policies that could have offered protection to the most vulnerable workers and citizens. 15 such considerations deserve attention. at the same time, globalization has often been an easy scapegoat. for example, empirical analysis shows that technological progress has a much greater impact on wage inequality than outsourcing or participation in global value chains. 16 it has also become increasingly clear that

flow of funds and national balance sheet accounts ’, the economic journal, 330, june. financial accounts continued to be used, though to a lesser extent, by economists such as wynne godley and raymond goldsmith. 6 then the asian crisis of the late 1990s showed the importance of sectoral financial connections and the need to study the balance sheets of banks, firms, and households. 7 since the start of monetary union, the ecb ’ s monetary analytical framework has included financial accounts as a tool for cross - checking its ‘ first pillar ’ ( economic analysis ) against its ‘ second pillar ’ ( monetary analysis ). 8 however, it was the global financial crisis that generated renewed interest. a lesson of the crisis was that tracking sectoral imbalances was important ; that an excessive level of debt may cause vulnerabilities ; and that therefore the pursuit of financial stability required monitoring the level of corporate and household debt and the leverage of financial institutions. finance was no longer a mere veil. in 2011 the european union adopted a surveillance procedure to monitor and correct macroeconomic imbalances. among the indicators used are three key elements of the financial accounts : the stock and the flow of private sector debt and the change in the financial sector ’ s liabilities. 9 finally, the importance of the interactions between the real economy and the financial sector for econometric modelling is now well - recognised and efforts are being made to integrate macro - financial relationships for key sectors such as non - financial corporations and households into large macro models. 10 godley constantly followed the idea that economic models should be founded on flows and stocks, and developed consistent models of the us economy and the economies of other countries ( see godley, w. and m. lavoie, 2007, monetary economics : an integrated approach to money, credit, income, production and wealth, palgrave macmillan, basingstoke ). goldsmith dedicated his research programme to the building of national and sector balance sheets, exploiting the financial accounts time series. see goldsmith r. w. ( 1969 ), financial structure and development, yale university press ; goldsmith r. w. ( 1985 ), comparative national balance sheets, a study of twenty countries 1688 - 1978, the university of chicago press. see allen m., c. rosenberg, c. keller, b. setzer and n. roubini ( 2002 ), ‘ a balance sheet approach to financial crisis ’, imf working papers, no. 210, international monetary fund,