Today, central bankers around the world need to be mindful of five growth-robbing challenges threatening the global economy over the course of the next several business cycles.
1. Stalling globalization. After fueling corporate profits and personal income gains through international trade, capital and labor flows for the better part of 30 years, globalization appears, at a minimum, to have stalled. But contrary to conventional wisdom, globalization is not destiny, it's a choice.
At present, we seem to be stepping back from globalization and as a result, emerging markets have taken a significant hit. Robust growth in developing markets helped spawn an emerging middle class in these countries, which has been a meaningful catalyst for global growth. But it will be difficult to stay on this path if the free movement of goods, capital and labor continues to languish.