Increased interdependence between countries has made the world more fragile

Countries have become increasingly interdependent in a number of areas: Finance, due to increasing cross-ownership of assets and debt between countries; The real economy, due to the segmentation of production processes (value chains); Growth models, as growth in some countries ha s become highly dependent on growth in their exports and in global trade. The extent of this interdependence means that any severance of these ties between countries would have a drastic effect on growth. This could take the form of: An end to capital mobility or a loss of confidence in the solvency of some countries, leading to massive sales of foreign assets and to the need for borrowing countries to wipe out their external debt; Protectionism, disrupt ing global value chains; The trend of production shifting closer to goods’ final consumers, making some coun tries’ export-dependent growth model inefficient.