WORRIES about the global economy are not just confined to sluggish growth, deteriorating demographics or the overhang of consumer and government debt. World trade, which used to grow faster than GDP, seems to have turned sluggish. In each of the last three years, growth has been less than 3% in real terms. The World Trade Organisation is hoping for 3.3% this year but it regularly has to cut its forecasts; there have been reports of export declines in recent weeks from Taiwan, Egypt, Indonesia, Jordan, and China, to name but a few.

Some of this year’s decline is down to a stronger US currency, of course, which reduces the dollar value of exports. But it is hard to believe that is the only thing going on. A new book from Vox EU covers the subject in great detail.

by Buttonwood

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