Global market structures and the high price of protectionism

Overview panel remarks by Mr Agustín Carstens, General Manager of the BIS, at the Federal Reserve Bank of Kansas City's 42nd Economic Policy Symposium, Jackson Hole, Wyoming, 25 August 2018.

Increased economic openness has profoundly shaped market structures. Low barriers to trade and investment let prices steer resources towards more productive uses, while international competition is a powerful force to keep firms nimble and prices in check. Recent measures that seek to undo this progress are alarming. Reversing globalisation puts at risk hard-earned economic gains. It could crimp growth, while raising prices and unemployment. Retreating into protectionism also risks unravelling the financial interdependencies that boost trade and investment. This could unsettle financial markets and depress capital spending. Real and financial risks might also amplify each other, generating a perfect storm.