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Defraigne, Pierre --- "A Monetary G3 with a Multilateral Perspective" [2012] ELECD 914; in Wouters, Jan; de Wilde, Tanguy; Defraigne, Pierre; Defraigne, Jean-Christophe (eds), "China, the European Union and Global Governance" (Edward Elgar Publishing, 2012)

Book Title: China, the European Union and Global Governance

Editor(s): Wouters, Jan; de Wilde, Tanguy; Defraigne, Pierre; Defraigne, Jean-Christophe

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781781004265

Section: Chapter 7

Section Title: A Monetary G3 with a Multilateral Perspective

Author(s): Defraigne, Pierre

Number of pages: 22

Extract:

7. A monetary G3 with a multilateral
perspective
Pierre Defraigne1

INTRODUCTION: TAMING GLOBAL FINANCE AND COPING
WITH MONETARY POLYCENTRISM
The world economy is heading towards a new balance in which emerging
economies are increasing their share of global GDP while Western
countries' share, caught in the eddies of the 2008 financial crisis, is
shrinking (48 per cent) and the least developed countries are lagging
behind. The change is not just quantitative: the Organisation for
Economic Cooperation and Development (OECD) countries share about
the same institutions and values while the BRICS display with the Group
of Seven (G7) countries and among themselves significant differences in
their governance and development models. While real convergence
between advanced and developing countries makes multilateral
governance more inclusive and fairer, these differences also make it more
difficult to organise.
The passing of the baton from the West to an emerging Asia is above all
the result of the intrinsic dynamics of market capitalism in its quest for
efficiency, lower labour costs and higher profits, combined with effective
although diverse development strategies in Asia. It also reflects diverging
demographic trends and the savings patterns attached to them, as well as the
change in sources of global labour supply whose productivity has been
raised by the diffusion of technology worldwide. But the shift from the West
to the East has been accelerated by severe market and policy failures:
emphasis put on debt-driven growth led to an underestimation of both the
financial instability risks and the impact of ...