Business & Economics

Through globalisation, economies have become increasingly inter-connected and complex. Although there have been significant benefits, this also brings about fragility towards the politics across the globe, think of Brexit, the rise of populists such as Trump, and China’s Belt and Road Initiative. This creates an unpredictable environment for the business world and poses new challenges for governments and intergovernmental agencies. This is the lens our policy centre would like to view the year through, focusing on the linkages between politics and economics, as well as improving the globalised economy.

Throughout the first term, we will focus on barriers to trade. With the rise of Trump’s trade wars, we want to consider the potential positive or negative externalities created by trade regulation. From tariffs and quotas to domestic measures and discriminatory regulations that halt trade, trade policy has effects on productivity and output. Globalisation and the growing importance of intergovernmental organisations and unions (WTO, EU, ASEAN etc.) mean that businesses and other economic operators must adapt to different types of regulation for their respective markets, as well as follow the laws of the overarching trade agreements. Thus, we will also consider the impact of these policy changes on businesses. Lastly, we will look at the potential for technological opportunities such as Blockchain to change current assumptions about global trade such as their ability to streamline current trading processes. For example, its capacity in addressing issues such as lack of transparency and security.

Although increased trade openness, due to globalisation, has been effective in raising aggregate income, it has also worsened the income inequality. In fact, this is a long run macroeconomic issue that public policy can have a significant effect on. Therefore, during the second term we will turn to income inequalities, a clear example of how economics can influence politics, and vice versa. We consider what this implies for politics, and more specifically, for the rise of populism. The rising inequality, as well as the lack of political response to it, has led to a trend of populist campaigns, such as the Five Star Movement in Italy, and the Law and Justice (PiS) party in Poland. We will also discuss the implications of these trends for the economy, as well as analysing possible policy solutions to the problem of inequality, such as basic income experiments.

Following these two main themes as well as the globalised economy and business world in general, we hope to come up with innovative policy approaches.

If you are interested in our work and want to contribute, feel free to contact us at vasulaxshmi.dharmavasan@kcl.ac.uk.

We look forward to hearing from you!

Laxshmi Dharmavasan
Director, Business and Economics Policy Centre