On March 18th, Tsinghua PBCSF Global Academic Leaders Forum themed on “Global Political Change and New Direction of Globalization” was held at the Main Building, Tsinghua University. Economic Nobel Prize Laureate Joseph E. Stiglitz and Michael Spence were invited to speak at the Forum. The Head of Tsinghua University National Institute of Financial Research and Former Deputy Managing Director of IMF, Zhu Min hosted the Forum.
Joseph Stiglitz holds the posts of American economist and professor at Columbia University, Co-chair of the high-level expert group on the measurement of economic performance and social progress at the OECD, and Chief Economist of the Roosevelt Institute. He is also the former senior vice president and chief economist of the World Bank and former chairman of the (US president's) Council of Economic Advisers.
In the speech of “Rethinking Globalization and Responding to the Challenges of the Trump Presidency”, Prof. Stiglitz stated, “The world has benefitted enormously from the post WWII global economic order, bringing fastest rate of global economic growth, successes of emerging markets and hundreds of millions moving out of poverty. But the order is now being challenged”. Currently, there seems to be more opposition to globalization as disparity between the “promised” jobs story and real jobs story undermined confidence in elites. The paradox, Mr. Stiglitz believes, is that globalization was supposed to increase the well-being of everyone, yet the idea of rising tide lifts all boats lacks theoretic support. Two analytic mistakes are made: the benefits of globalization are overestimated and its distributive consequences are underestimated. Consequent problems include opening of trade may increase risk; imperfect competition may provide more scope for monopsony/monopoly; and standard model ignores dynamics of comparative advantage.
He said that new protectionism of Trump office should not be the answer. De-globalization may lead to net job losses just as globalization may have done. As to the inequality and risks brought by globalization, he suggested the US should take remedial actions such as a better social security system.
Michael Spence is a professor at Stern School of Business, New York University, and a senior fellow at Stanford University Hoover Institution. Prof. Spence delivered his keynote speech entitled “Growth Patterns and Political Circuit Breakers”. “It is confusing that we operated with a global system”, he said, “and for much of the post WW II period this appears to be breaking down.” There is considerable skepticism about the wisdom of having totally open capital accounts, and he believes according to his knowledge in emerging economies that none of these who have totally open capital accounts make sense as they develop.
In the Internet era, Prof. Spence pointed out that there is increasing awareness that there exists downside to the Internet, including cyber security, privacy, etc. However, with the accelerating of technology development and growing of databases, he believes that the transition is happening now, and quite encouraging. Through examples of Amazon’s automated warehouse, 3D printing, and robots with vision, Prof. Spence also illustrated the changes and influences technology has brought about recently.
During the round table discussion session, Mr. Zhu Min discussed with the two speakers on issues covering the trends of globalization, its influences on trade and employment, and the role of technology in it. Speakers both drew the conclusion that deep globalization is unlikely to happen right now. We are currently at a transforming phase between deep globalization and de-globalization where risks management should be strengthened and emphasized.
Tsinghua PBCSF Global Academic Leaders Forum is a public non-profit academic forum. The world’s most renowned speakers, including Nobel laureates, noted professors, and senior executives from foreign central banks and other financial regulators are invited to share their insights.
