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When Nobel Avengers Assemble To Discuss The Future Of World Economy

In Lindau, ahead of the 6th Meeting on Economic Sciences
In Lindau, ahead of the 6th Meeting on Economic Sciences
Stuart Richardson

Mario Draghi didn't give much away in his opening remarks at the 6th Lindau Meeting on Economic Sciences in southern Germany. In his highly anticipated speech Wednesday morning, the president of the European Central Bank kept mum on the most titillating topic in Europe: upcoming stimulus negotiations.

However disappointing, his silence was not altogether surprising: Draghi has to bear in mind the political consequences of his words. But this is not necessarily true for the rest of the conference speakers. In this veritable meeting of the minds, held every three years, 17 Nobel laureates in economics will take the stage this week to share their thoughts on the world's financial future. And while there are reasons for this intellectual dream team to feel optimistic — a decade after the start of the global financial crisis, the world's economy appears to be well on the mend — there is also cause for concern, as the German daily Die Welt noted on the eve of the conference.

So what exactly keeps these prize-winning economists up at night? Donald Trump, for one thing. The laureates emphasize that about-faces in Washington, global terror and potential nuclear disputes could trigger a bank run if not properly handled.

In fact, thinking we are secure only increases the possibility of another crisis, argues Finnish economist Bengt Holmstrom, last year's Nobel Prize recipient. Edward Prescott, the 2004 laureate, told Die Welt, adding that a financial crisis will take place in the not so distant future "with great certainty."

What exactly keeps these prize-winning economists up at night? Donald Trump, for one thing.

Another problem is the world's expanding digital network. With greater interconnection between national governments, businesses, and financial systems comes the potential for more chaos. As 2000 Nobel Prize winner Daniel McFadden explains, financial risks move like "electricity" through this vast network, and even small problems can easily infect the entire system.

Unfortunately, says McFadden, the world hasn't developed the proper mechanisms to survey, regulate, and manage its instabilities — quite the opposite. Since taking power in January, the Trump administration has worked to undo global cooperation in many areas, most notably by removing the United States from the Paris Climate Accord. The U.S. leader has also pledged to revoke parts of Dodd-Frank, a crucial piece of legislation that curtailed abuse on Wall Street in 2009.

Each rollback, the economists argue, poses more uncertainties for the future and ups the chance that history — and a not-so-distant one at that — will ultimately repeat itself.

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FOCUS: Russia-Ukraine War

Why Poland's Break With Ukraine Weakens All Enemies Of Russia — Starting With Poland

Poland’s decision to stop sending weapons to Ukraine is being driven by the ruling Law and Justice (PiS) party's short-term electoral calculus. Yet the long-term effects on the world stage could deeply undermine the united NATO front against Russia, and the entire Western coalition.

Photo of ​Ukrainian President Volodymyr Zelensky with Polish President Andrzej Duda in Lutsk, Ukraine, on July 9

Ukrainian President Volodymyr Zelensky with Polish President Andrzej Duda in Lutsk, Ukraine, on July 9

Bartosz T. Wieliński


WARSAW — Poland has now moved from being the country that was most loudly demanding that arms be sent to Ukraine, to a country that has suddenly announced it was withholding military aid. Even if Poland's actions won't match Prime Minister Mateusz Morawiecki’s words, the government has damaged the standing of our country in the region, and in NATO.

“We are no longer providing arms to Ukraine, because we are now arming Poland,” the prime minister declared on Polsat news on Wednesday evening. He didn’t specify which type of arms he was referring to, but his statement was quickly spread on social media by leading figures of the ruling Law and Justice (PiS) party.

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When news that Poland would be withholding arms to Ukraine made their way to the headlines of the most important international media outlets, no politician from PiS stepped in to refute the prime minister’s statement. Which means that Morawiecki said exactly what he meant to say.

The era of tight Polish-Ukrainian collaboration, militarily and politically, has thus come to an end.

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