Columbia University Professor and respected economist Xavier Sala-i-Martin predicts the global economy is poised for a big shift as artificial intelligence (AI) plays a transformative role in how companies function.
Sala-i-Martin – the developer of the Global Competitiveness Index – delivered the keynote address during Seafood Expo Global, which ran from 6 to 8 May in Barcelona, Spain. Focusing on the uncertain economic climate facing global trade, Sala-i-Martin was critical of the current trade war, which has disrupted the free flow of trade between different countries.
“We are threatening this wonderful system,” Sala-i-Martin said. “The biggest story of the last three months has been that the largest richest country in the world is trying to move from this system that we created.”
Sala-i-Martin said free and open trade is good, and benefits everyone in both countries when it happens. He compared it on a micro scale to how normal commerce takes place.
“When I buy a cup of coffee from the coffee shop, I send money to them, and they send product to me. I get a coffee, you get money. And because we do it voluntarily, we both win. It’s a win-win situation, otherwise I wouldn’t buy the coffee, right?” he said.
International trade is largely the same situation, as countries that buy more product from the other are engaging in a mutually beneficial exchange of goods and money.
“If we don’t allow people to buy coffee from one another, we all lose. Trade is good, and therefore, barriers to trade [are] bad,” Sala-i-Martin said. “In the newspapers, you will hear politicians saying that deficits are bad, bilateral deficits are bad. Now if you think about it, when I go to a coffee shop and I give money in exchange for a coffee – I’m running a trade deficit.”
Any trade deficit between the U.S. and another country is similar to that relationship – there may be a monetary loss, but there’s a gain in the goods that the money was exchange for...
