olli rehn : global economy - fragmentation, decoupling or slowbalisation? keynote speech by mr olli rehn, governor of the bank of finland, at a conference coorganised by the european central bank, hong kong institute for monetary and financial research and bank of finland institute for emerging economies, hong kong, 13 january 2025. * * * presentation accompanying the speech distinguished guests, ladies and gentlemen, dear friends, let me start by thanking the hong kong monetary authority for hosting this topical and thought - provoking conference. discussing the changing global economy in " asia's world city " is, of course, very appropriate. i would also like to thank the representatives of the european central bank for their involvement in putting together the programme for this excellent event. this conference is a good example of fruitful cooperation between central banking authorities from different parts of the world, and certainly a tradition worth preserving. as the title of the conference implies, the global economy is undergoing a transformation. in my talk today i would like to address a key aspect of this transformation, namely decoupling and fragmentation in the global economy. is there evidence of geoeconomic fragmentation in the global trade and investment data? or is global trade simply following the same trajectory as global economic output? there is, of course, an important difference between the paths of global trade and global output. slide 2. a period of normalisation after hyper - globalisation? we can, in my view, reasonably start the analysis of any decoupling or fragmentation with a slide like this, which shows the value of the global goods trade in relation to the global gross domestic product ( gdp ). we can observe how this percentage climbs in the late 1990s and 2000s, pushed by the integration of china and former socialist countries into the global economy and global value chains. in the early 1990s global trade was roughly 30 % of the global gdp, and by 2008 this had increased to over 50 %. as the graph shows, the global financial crisis marked a clear turning point. since then, the level of global trade in relation to global gdp has fluctuated between 45 % and 50 %. should we call it'slowbalisation '? 1 / 4 bis - central bankers'speeches there are of course many reasons for this relative stagnation, but here in hong kong we should note at least one factor. whereas in the early 2000s many value chains in east asia were international, by the 2010s a larger share of production had

2021 money and banking conference online seminars macroeconomic conditions, growth and income distribution. underlying problems of the global economy and lessons from the pandemic november 03rd, 10th, 17th & 24th www. bcra. gob. ar closing remarks from the 2021 mbc miguel angel pesce governor, central bank of argentina it is time to close the 2021 edition of the bcra ’ s money and banking conference, which consisted in online seminars, as in 2020, because of the covid - 19 pandemic. the presentations delivered these past few weeks have been stimulating indeed. speakers have discussed the lessons learned from the pandemic, the problems that still exist, and the structural challenges in relation to the macroeconomy, distribution and growth from different viewpoints and based on various experiences. a significant part of the discussion focused on the relationship between fiscal policy, growth and inequality. speakers have highlighted how the exceptional conditions resulting from the covid - 19 pandemic have led to some kind of “ change of eras ”, evidencing both the inability of purely neoliberal policies to solve the crisis, and the need for structural reforms aiming at inclusive, sustainable growth. although the pandemic has globally pushed the tolerance threshold for fiscal deficit to new levels, following this agenda of economic recovery in the medium and long term without compromising fiscal sustainability poses some challenges. moreover, it has been stated that the increase in public spending, which has turned out to be effective amid the economic emergency, should be reconsidered in terms of composition in the long term. in this regard, the importance of channeling public spending into education, childcare, health and social assistance has been highlighted, given the long - term benefits for society as a whole, along with a potential, positive impact on productivity. we have also discussed the role of monetary and financial policies in sustainable economic development with social inclusion. emphasis has been placed on the negative effects of macroeconomic instability on inequality, and the manner in which the latter deepens recession. the challenges faced by central banks when implementing policies that may help to mitigate the impact of the economic cycle on inequality have also been underscored. as it reduces marginal propensity to consume, inequality weakens the channels of monetary policy transmission onto aggregate demand. at the same time, low - income sectors face increased restrictions in access to credit, even at lower interest rates. finally, trade - offs that may pose dilemmas in monetary policy have also