Relations are growing frostier globally, as political leaders become more nationalistic. And this change in climate is impacting economies, rendering them less cooperative. Two significant changes affecting the global business cycle include the US Fed’s tighter monetary policy, the impacts of which have rippled throughout the world, as well as the geographical shift of the centre of manufacturing production to the East, to the dismay of some Western leaders.
If it seems as if the world has changed, it is because it has. Economic growth, for example, lags behind the levels reached before the 2007/2008 financial crisis even in developed countries. The need for governments to step in with proactive fiscal policies to kick start their economies has never been greater.