Macroscope | Time for G7 and G20 to prioritise dollar dominance and other economic and financial issues
- Questions about global financial risks and the unipolar dollar system should be high on the G7 and G20 summit agendas, but they are not
- The trouble is that US monetary policy that is designed with domestic considerations in mind has a global impact due to dollar dominance
There is a growing threat of recession hanging over the global economy, ongoing inflation, rising interest rates, huge debt, tightening credit, weakening investment sentiment, banking stresses, softening employment, and supply chain issues. But you might never know it from looking at the G7 summit agenda.
What you will see on the agenda are the Russia-Ukraine war, the need for a “free and open Indo-Pacific”, nuclear disarmament and non-proliferation, “economic security and resilience”, plus climate, food and health issues. But there’s little about economics and finance as such.
It is truly remarkable (and dismal) how often the importance of what is going on in the global economy tends to be overlooked by national leaders who appear more concerned with their own political and ideological agendas than with the technicalities of economics and finance.
This has probably never been more true than today, when leading Western capitals seem to be riveted by what is happening in places like Kyiv or Taipei, often at the expense of what is going on in the arena of economies, the marketplace or the realms of commerce and industry.
Such nonchalance explains why economic and financial crises are perceived to sneak up on societies when, in truth, a little more timely attention paid to what is going on in the economy, and less to political posturing, would give earlier and better warnings of impending trouble.