The Post-2007 Crises and Europe's Place in the Global Economy

In the newest CASE Network Studies and Analyses CASE Fellow Richard Pomfret provides a brief review of the three economic crises of 2007-12, and an analysis of the impact of these crises on Asian countries. According to him the Asia-Pacific region did not experience significant financial crises. The open economies were affected by the global economic crisis, but they recovered relatively rapidly after a drop in exports and in economic growth in 2009. In consequence, the weight of Asian economies in the global economy, which had been increasing for several decades, grew even more rapidly in 2009-11 as the economies of the USA and Europe faltered.

The paper further analyses the challenge posed for global economic governance, currently dominated by the USA and western European countries, and concludes that competition for leadership among the larger economies and limited leadership resources within the smaller economies constrain Asia from becoming a more assertive force. In depth the paper analyses the challenges Europe faces as a result of Asia’s increased weight in the global economy, focusing on the risk of being absent from the negotiating table for plurilateral trade agreements among the major economies.