The World's Shifting Balance

Is the global economic crisis just a turn in the traditional cycle?

BBC Radio 4's Analysis: The World's Shifting Balance will be broadcast on Thursday, 17th July 2008 at 20:30 and repeated on Sunday 20th July at 21.30 BST

Read the programme transcript

The combination of a financial crisis in the US with rising inflation across the globe is astonishing.

In the past a sharp slowdown in the world's biggest economy would have brought lower global demand, a decline in growth and so lower commodity prices and reduced inflation. We are witnessing the opposite today.

So does this mean that a fundamental shift in global economic influence is under way? Big emerging countries, like China and India, do indeed seem to have become decoupled from the long-dominant US. But have they also been transformed into locomotives of the world economy?

Economic commentator Martin Wolf

In discussion with some of the world's leading analysts - including two former chief economists of the International Monetary Fund and the current chief economist of the World Bank, who is Chinese - Martin Wolf assesses these hugely important questions.

He concludes that decoupling is real: emerging countries are able to grow quickly even though the US and other western countries are in a slowdown. The global balance has indeed shifted.

Interviewees: Justin Lin Chief Economist, The World Bank Kenneth Rogoff Professor of Economics, Harvard University Raghuram Rajan Professor of Finance, Graduate School of Business, University of Chicago and Chairman of the committee of financial sector reforms for the Indian Government Charles Dumas Chief Economist of Lombard Street Research Ngaire Woods Professor of International Political Economy at Oxford University Peter Bernstein Author and market historian

This shift demands a parallel change in the structure of global economic governance. Yet the emerging countries will not emerge from these troubles unscathed. The danger now is of slowing growth and higher inflation worldwide - in other words, a mild version of the global stagflation that wrought such havoc in the 1970s.

Presenter Martin Wolf is the chief economics commentator of the Financial Times.

Producer: Sandra Kanthal
Editor: Nicola Meyrick

In next week's programme:
Are the recent elections in countries like Russia, Iran and Zimbabwe evidence of a dangerous trend for autocratic regimes to seek legitimacy through the ballot-box? Or are bad elections better than none at all? Zareer Masani considers if we're too obsessed with elections as the key to democracy.