Cold War II? Preserving Economic Cooperation Amid Geoeconomic Fragmentation
Plenary Speech by IMF First Managing Deputy Director Gita Gopinath
20th World Congress of the International Economic Association
Colombia
December 11, 2023
Introduction
Good morning. It is an honor to speak at the 20th World Congress of the International Economic Association.
The overarching question of this congress is “Are we at a turning point?”
I believe we are. In fact, I will take this congress’ question a step further and ask: are we on the brink of Cold War II? The historian Niall Ferguson argues that we already are. If so, what would that mean for the global economy? And how can we preserve the gains from economic openness within a more fragmented world?
To answer these questions, I will first briefly trace the history of cross-border trade relations during the twentieth century. I will then examine the parallels and differences between the Cold War and today. I will describe the signs of fragmentation that we see in trade and investment data so far and discuss the potential economic costs should the fault lines deepen. Finally, I will offer three principles for protecting economic cooperation in a more fragmented world.
Pandemic, war, and growing tensions between the two largest economies of the world—the US and China—have undoubtedly changed…
