Pax Sinica: How will economics respond to the 'new global order'?

Economics will find a way to include protectionism but building a theoretical case for budget deficits will be much harder

A few days ago, a well-known columnist who likes to ruminate in this newspaper wrote about the uncertainties looming ahead. These mostly arise from the emergence of China as a wannabe rule-maker.

I have been wondering since reading that column how economics will respond to the so-called new world order. This is because after 1950 economics was pressed into service to serve America’s economic objectives — exports of goods and capital.

China has been asserting the right of China to make its own rules, as the US had done after 1945. This is what has led to talk of a new global