Carmen Reinhart: Global Risks in a Geopolitically Fragmented World

BEC Luncheon

Global Risks in a Geopolitically Fragmented Word

featuring

Carmen Reinhart

Minos A. Zombanakis Professor of the International Financial System at Harvard Kennedy School

SUMMARY

Mounting debt levels in advanced economies have pushed interest service costs higher, limiting governments’ fiscal space to deal with other issues. Interest rates, however, are still on the low side of historical experience, a situation potentially changing as major central banks continue to firm monetary policy. The competing pressure on government resources will intensify, as well potentially as the pressure on central banks from fiscal authorities. In some countries, notably the US, spending on infrastructure to build out artificial intelligence capacity has provided important offsetting stimulus to spending. But the narrowness of this support poses its own risks.

Carmen Reinhart puts all this in historical context to addresses how investors should navigate increasingly volatile financial markets in a review of the global economy. What are the consequences of lessened policy space to deal with adverse shocks? Where around the world are fiscal finances most strained? And what is the future of the reserve status of the US dollar?

BIO

Carmen M. Reinhart is the Minos A. Zombanakis Professor of the International Financial System at Harvard Kennedy School and a leading scholar of sovereign debt and financial crises. She previously served as Senior Vice President and Chief Economist at the World Bank and held positions at the International Monetary Fund and Bear Stearns. Her research has shaped academic and policy debates on debt, banking crises, capital flows, and economic development. She is co-author, with Kenneth Rogoff, of This Time Is Different: Eight Centuries of Financial Folly, an influential study of financial crises across history. Reinhart’s work is distinguished by its historical breadth, empirical rigor, and relevance to contemporary economic policy.