This document discusses the backlash against globalization seen in events like Brexit and the election of Donald Trump. It examines some of the factors driving this sentiment, including inequality from globalization, xenophobia, technological changes, limits on the welfare state, and a crisis in representative democracy. The document also considers prospects for the global economy in 2017 under a Trump administration, noting uncertainty but that globalization will likely continue, though possibly at a slower pace.

1. A new world order? Brexit, Trump
and the global economy in 2017
Federico Steinberg
Real Instituto Elcano
@steinbergf
Fundación Ramón Areces, Madrid. December 12th 2016

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• What explains the backlash against globalization:
beyond traditional explanations of inequality and
xenophobia
• Prospects for the global political economy in 2017:
Trump and beyond
Outline

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The leaders of the rebelion against globalization

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What is behind the great rebelion?

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1) Inequality: loosers from
globalization revel

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2) Xenophobia

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3) Technology

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4) The welfare state creates protectionism

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Limits of the welfare state?

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5) The crisis of representative democracy

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Looking into the future: Uncertainty

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• Globalization will not stop
• One can vote for Trump or Brexit, but it is more
difficult to vote against globalization
• Does Brexit and Trump represent the end of
neoliberalism and the beguining of neo-nationalism?
What to expect for the global economy?

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• In any case, globalization is slowing down
• And that is not necessarily a bad thing

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• Trump has a more or less clear economic strategy,
but he does not have a foreign policy strategy
• NATO and a rules based liberal multilateral economic
order underpinned US hegemony has provided
stability to the West for the last 60 years
• Will this end?
• Probably not, but we don´t know
What will Trump do?

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• Fiscal expansión (infrastructure, military spending)
• Lower taxes for the rich
• Higher fiscal deficit, higher public debt
• More growth, more inflation, higer interest rates…
• Trump could end with secular stagnation!! Or not.
• But what will happen to trade policy?
• Probably no new deals (TPP, even TTIP), but no
destruction of current trade infrastructure
If Trumpnomics is Reganomics 2.0 …

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• The backlash against globalization is here and it will
not go away
• We should do something about it!
• We need to know what Trump´s policy will be to
reduce uncertainty and have a clear picture of what
lies ahead
Conclusion