● The Great Global Transformation: The United States, China, and the Remaking of the World Economic Order
Branko Milanovic
Review via Compact
In his compelling analysis, Branko Milanović argues that our crumbling neoliberal framework has become so excessively globalized and overstretched that it is now self-referential. Consequently, we find ourselves commodifying even our leisure, making it increasingly hard to enjoy our free time unless it is broadcast through social media. Milanović expresses skepticism about the possibility of reintegrating market mechanisms into renewed social democracies and welfare states. While he anticipates the decline of neoliberal globalization, he envisions a regression to “national market liberalism,” where neoliberal frameworks are confined within nations, favoring market elites over a balanced state-market relationship.
After the AI Crash: Bubble Burst or an Economy-Wide Crash?
Asad Ramzanali (Vanderbilt Policy Accelerator/Vanderbilt U.)
March 2026
The public is increasingly worried about the levels of AI investment. Many are drawing parallels to the dot-com bubble, but the current economy’s deep reliance on AI investment combined with complex financial practices suggests that a market correction could resemble the 2008 Great Recession instead, resulting in systemic chaos. After such a downturn, lawmakers will rush to devise a reform agenda, often sidelining thorough reforms for quick solutions. It doesn’t have to be this way. Instead of waiting for a crisis to unfold and developing inadequate policies in haste, legislators should proactively prepare for the looming challenges. The nature of the crash will dictate the response, but for meaningful reforms to take root, policymakers must commence discussions now. This paper examines potential crash scenarios and proposes policy recommendations for Congress.
The importance of diversifying across various asset classes as a risk-management approach is widely acknowledged. However, it’s crucial to recognize that the effectiveness of this strategy can change over time. While this doesn’t discredit global asset allocation, it serves as a reminder that individual experiences may vary.
Fears surrounding inflation have led markets to believe that a reduction in interest rates by the Federal Reserve is highly unlikely this year. Although further increase in rates is also deemed improbable, it remains a possibility, albeit a minor one. This shift in sentiment, largely influenced by the escalating war in Iran, has caused energy prices to spike and is affecting the bond market. There is hope that the conflict will soon conclude, allowing oil and gas exports from the Middle East to resume, thereby alleviating inflation pressures.
President Trump’s announcement to suspend strikes on Iranian infrastructure led to a surge in risk assets on Monday (March 23). It remains uncertain whether this marks a brief pause or a genuine diplomatic opening toward a ceasefire. Nevertheless, risk assets found some reprieve yesterday. Commodities have been the strongest performers among the major asset classes this year. However, recent results for 2026 show a more balanced outcome up to yesterday’s market close, as evidenced through various ETFs.
The ongoing war in Iran has now reached its fourth week, with no indications of an impending resolution. While conditions for a potential stalemate or ceasefire may be developing, there is currently no sign of de-escalation. The stock market will continue its search for a bottom during this volatile period. When a turning point materializes, it will likely coincide with a sentiment that geopolitical risks have peaked.
● Money Beyond Borders: Global Currencies from Croesus to Crypto
Barry Eichengreen
Review via Financial Times
The recent struggles of the US dollar—having fallen over 10 percent against major currencies since early 2025—have sparked renewed debates about its future. How much longer will it retain its status as the world’s foremost currency? What might be required to eventually dethrone it? If it were to falter, what could take its place—a new dominant reserve currency, a collection of quasi-reserve currencies, or even a cryptocurrency?…
Eichengreen speculates that should the US dollar lose its prominent position, the root causes will more likely be self-inflicted rather than due to external competition. He identifies several significant risks, including increased tariffs, America’s mounting fiscal issues, the erosion of Federal Reserve autonomy, the broader application of financial sanctions, and a withdrawal from established international alliances. The current US administration has leaned towards all these risk factors, at times significantly.
Despite the turmoil from the war in Iran sending ripples worldwide, the US economy has surprisingly remained stable thus far. The question of how long this stability will sustain remains, and will likely depend on the conflict’s duration.
The Federal Reserve possesses extensive resources to analyze economic conditions in order to appropriately adjust monetary policy. However, sometimes the insights from a central bank’s research apparatus are as vague as those shared by someone waiting at a bus stop. This is particularly true in the current climate of uncertainty stemming from the ongoing war in Iraq.
The burden of the current situation is not distributed evenly. The fallout from the war in Iran underscores this reality. Following the onset of hostilities on February 28, nearly all major asset classes—with the exception of commodities and cash—have dipped into negative territory, resulting in widespread losses across global markets through yesterday’s close (March 17).
