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LPS-EC206 The Global Economy: Rethinking world leadership and the great shift east

Professor Danny Quah, Economics and International Development Departments, London School of Economics and Political Science.

Course Outline

In the new millennium a modern hypothesis arose on how a ``Global Power Shift'' was irrevocably altering the established world order.  Basing their arguments on economic and geopolitical analysis, proponents of this view argued that a Great Shift East---towards China, towards other emerging economies---was challenging the established international system that for the last 500 hundred years had been based on the overwhelming economic and military superiority of the West.  Even as the planet grew ever more inter-connected, a new balance of power was forming that would reveal a world no longer unipolar on the Transatlantic Axis and dominated by the US.

But how firmly established are these hypothesised changes? And if real, what fresh challenges do they raise for the global economy? Some observers, of course, had never believed any such shift in the global economy was taking place.With economic experiences everywhere continuing to evolve, many more observers have begun to view with suspicionprevious optimism on the performance of emerging economies:Will the advanced economies be the ones to show robust, sustained growth instead?

Whether or not the global economy has shifted, all observers decry how genuine world leadership has declined.Perhaps the US has simply lost its confidence or its willingness to lead the global community in addressing the world'schallenges, perhaps the US feels the resources it might have devoted to global hegemony are no longer justified. But, whatever the reason, it is also the case that no viable alternative has risen to replace the US.The policy errors that led to the 2008 Global Financial Crisis, the inability of the world economy to recover from recession, the continued instability of the international financial system, the threats to international trade and global growth are all, in this view, problems that can only be solved by joint global action, not through self-serving country-by-country individualism.  Today's new normal is neither healthy nor prosperous. 

This course develops and critically evaluates the empirical evidence on the large forces shifting the global economy.  It analyses the economics of world leadership---in the world's reserve currency and the international financial architecture, in the formation of economic coalitions, in the international trading system, in macroeconomic and monetary policies.  And it presents the economic history of national rise to power---regional and global---across different parts of the world.The course will build alongside that empirical quantitative narrative theoretical analyses to help evaluate the implications of these shifts.  Included among these are analytical ideas that combine:  the Middle-Income Trap; China's Peaceful Rise; US Unipolarity; Soft Power; Global Imbalance and the World's Reserve Currency; Global Hegemony; Global Public Goods; and World Leadership.

Full course outline:|


About the instructor


Professor Danny Quah, Economics and International Development Departments, London School of Economics and Political Science

Danny Quah is Professor of Economics and International Development, and Kuwait Professor at LSE; Senior Fellow at LSE IDEAS; and Chair of the LSE-PKU Summer School Board. He is also Tan Chin Tuan Visiting Professor in the Economics Department at the National University of Singapore and from 2009-2011 served on Malaysia’s National Economic Advisory Council. 

He studied at Princeton, Minnesota and Harvard, and was Assistant Professor in the Economics Department at MIT before joining LSE. Danny Quah gave the 3rd LSE-NUS Lecture in 2013, a TEDxLSE lecture in 2012, and the Inaugural LSE Big Questions Lecture in 2011. His current research focuses on the shifting global economy and the rise of the east.

For further information, please see Professor Quah's LSE Experts |profile or his personal website|