Trade disruptions also increase variability of inflationWe have to focus on risk management, balancing upside risks to inflation with downside risks to economic growthCost of global goods many not fall as fast as globalization, and that could put more upward pressure on inflationGlobal trade has slowed and that is a big concern for CanadaThe growth we are seeing in trade is shifting from goods to services, pandemic may have provided a more durable boost to trade in servicesSeemingly vast potential of digitalization suggests future growth in trade will tilt to services
The last comment on digitlization is a notable one for the long-term macro view of the world. Digital services are a seeming winner-take-all and the winners will likely be AI agents. Managing that will be a huge challenge for economies.
This article was written by Adam Button at www.forexlive.com.
