Is the Global Economy Shrinking? Prof. Javier Diaz-Giménez calls for EU to strengthen institutions


In this video, IESE Prof. Javier Diaz-Giménez argues that the global economy is not shrinking. However, while growth will continue at a brisk pace in emerging markets, developed countries will continue to grapple with slow growth, he says.

To face this challenging scenario, the EU needs to strengthen institutions and the banking system, unify regulations and supervise insurance schemes under a single entity, he said. In addition, Diaz-Giménez calls for more flexibility in labor markets and a restructuring of the European welfare state, "which has proven to be very expensive."

Meanwhile, a key task for the U.S. will be to address problems related to the qualifications of the labor force, which is feeling the competition coming from emerging economies, he says.