Welcome to the new geological economy

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Your guide to what the second period of Trump means to Washington, business and the world

At the end of last week in Washington, near the White House, dozens of economists of universities and institutions such as the International Monetary Fund, which gathered to discuss a situation “Geological economy”.

geographicWhat? Some readers may ask. No wonder: Until recently, this word has not been used a little, because it seemed at odds with modern standards.

This is because the phrase describes how governments can use economic and financial policies to play energy games. But in the intellectual framework of the free market in the twentieth century-the framework in which most Western professionals built their career-it was generally assumed that rational economic self-interest governs gravity, not a dark policy. Policy seems to be derived from the economy – not the other way around.

no longer. The trade war launched by US President Donald Trump was shocked by many investors, as it seems irrational according to the standards of the neoliberal economy. But or not, but it reflects a shift to a world that ranked the second place for political games, not only in America, but many other places as well.

Even universities such as John Hopkins, Dartmanand like Stanford is looking to expand “geological economy” programs (with the latter’s use Automated learning For this purpose), along with entities Like the International Monetary FundMilkin Institute and Atlantic Ocean Institute. And Dane Alivarius, a former US Treasury official, is also You are urging companies now To create a new role for “CGO” – or the chief political geography employee – “to move in unclear lines between trade and statecraft” where “rulers (i.e. governments) changed the rules.”

It is still unclear whether companies will actually adopt. But in the meantime, investors and business leaders will achieve good results in observing five main points on this geological economy discussion.

First, this phenomenon is not just one man (Trump), but rather a much larger turning point in the intellectual age – of the type we have seen several times before.

One of these transformations occurred slightly more than a century ago, when the global imperialist vision of capitalism that prevailed before the First World War was displaced by national protectionist policies. Another came after the Second World War, when the Kinzian economy took. Then, in the eighties of the twentieth century, neoliberal ideas in free markets explained the Kinzi.

The fact that the intellectual pendulum is now swinging again, towards more national protectionism (with a dose of the Keynesian military), and thus fits a historical style – although little is expected to swing this shape completely.

Second, one of the aspects of this important transformation in this transformation in the era is that governments are no longer “only” focusing on the well -being of their country, but also on its relative positions. This distinction may seem accurate. But it is deeply concerned, like Paper participated in authored by Aaditya Mattoo, The World Bank’s economist, along with Michelle Rota and Robert Stage.

This is because the “absolute luxury” mentality supports commercial cooperation, but it reveals “if the competition exceeds any consideration for the well -being of the private country,” says the authors. In other words, Trump’s angry discourse about “America’s tearing” by competitors, in other words, reflects a greater mental transformation.

Third, the (clear) factor behind this competition is that China is now challenging the dominance of the current America. This style is often seen before, as Ray Dalio, the hedge box, note, in a Provocative book. Investors should also notice that Dalio suggests that such a conflict is rarely dissolved quickly or smoothly – at least when there is a debt cycle.

Fourth, as the United States and China resort to geological economy strategies, other countries follow in response to the response. Just look at how The European Central Bank is racing to develop the digital euroThe Kingdom of Saudi Arabia is developing its technology staple, or Japan uses its cabinet holdings As a “card” in commercial conversations. This means that technological policies, trade, financing and army are mixed in a way that has not been seen during the neoliberal era.

Fifth and finally, industrial policy has returned. This started in America under the leadership of President Joe Biden. But Trump doubles, with definitions. To understand this, look at a Beating a new book The name The industrial policy of the United States Written by Mark Fasto and Ian Fletcher, two of the economists loved by the Maga crowd. They slow down the definitions, but they also encourage the need for other industrial policies as well, referring to South Korea, Japan, China and Germany as examples of simulation.

It is not clear whether Trump will follow his advice. But what is clear is that there is increasing acceptance in the United States that the government should form trade in the national interest. This will always lead to regions like Europe to follow their example.

All of this will scare many observers, especially those who grew up in that neoliberal era. But do not expect the intellectual pendulum to swing soon – even if the United States lower some commercial deals, such as Dan Evasin from Pimco Notes, Trump’s love for definitions deepens. For better or worse, we all need to learn to move in the geological economy. We can only wish that.

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