Making Chimerica great again

Abstract

A decade after the outbreak of the global financial crisis, a large trade imbalance between the world's two biggest economies, the U.S. and China, still exists and is more politically contentious than ever. This economic relationship, which we termed ‘Chimerica’ in 2007, seemed likely to end as a result of the global financial crisis. Yet this did not happen. In this paper, we examine the evolution of Chimerica in the aftermath of the global financial crisis and explain how the stimulus policies of both the U.S. and China have contributed to its survival. We show how stimulus policies helped change Chimerica from a marriage of opposites to a marriage of equals. We then explain why this marriage is now destined for strife, in the form of a trade war between the U.S. and China. The consequences of such a trade war would deeply impact the global economy. We believe constructive negotiations on trade rebalancing and policy coordination are therefore needed to avoid a disruptive end to Chimerica.

Plan Z: Reassessing Security-Based Accounts of Russia's Invasion of Ukraine

“…It is the rising Russian Empire of Peter the Great," Putin's favorite historical leader. 59 Similarly, Mark Galeotti, a noted expert on Russian security affairs, argues that "the use of force, in this context [i.e., against Ukraine in 2022], is a symptom of the degradation of checks and balances on the monarch." 60 In The Road to Unfreedom: Russia, Europe, America, historian Timothy Snyder emphasizes Putin's valorization of the writings of Ivan Ilyin, a quasi-fascist thinker who was influential in reactionary circles of White émigrés that fled Russia during the civil war, and whom Putin quoted at the end of his 30 September speech announcing the plans to annex the Donetsk, Luhansk, Kherson, and Zaporizha provinces.…”

A Double Thucydides Trap

“…The revenue from the latter fueled Beijing's massive acquisition of u.S. government bonds, thus encouraging further growth of consumer demand in the u.S. The effect of Chimerica was truly global: return on equity grew everywhere and interest rates and labor costs went down (ferguson and Xu, 2018). In the meantime, in the united States itself many industries turned uncompetitive, while China, having gained the status of the world's factory in the 21st century, was already making investments not only in u.S. bonds but, above all, in the newest technologies, infrastructures, and human resources.…”