The global economic elite are gathering at Davos this week and will be asking themselves many questions. How healthy is the global recovery? What will Eurozone quantitative easing look like? Does inequality matter?

There is one question they probably won’t be asking but really should: who’s in charge?

Because on one important level at the heart of global macroeconomics is some old fashioned and straight forward microeconomics. Namely the theories of public goods and common goods — goods which are, in the jargon, non-excludable. That is to say goods which people (or in this case governments) can’t be stopped from using , even if they don’t contribute to them.

The public and common goods I am thinking of here are intentional economic stability and the closely related idea of a stable international financial and monetary system.

The potential problem with such goods is that they can lead to the tragedy of the commons.

It is the interest of every state to have a stable world economy but each state is equally incentivised (at least in the short term) to do what is best for its own economy. Added together these equally, and individually, rational policy decisions can create an international order that is far from stable.

And that helps no one in the longer run.

In the absence of a strong and clear global economic leader, then the risk is that no one state can cajole the others to respect these public and common goods.

If the run up and aftermath of the global financial crisis taught us anything it’s that global economic developments can play a large role within countries.

As the Bank of England’s Ben Broadbent has demonstrated (to the left), in the case of the UK, we are hardly immune to what happens elsewhere.

Last week, the Swiss National Bank took policy steps that may have a severe impact on exporters in a country pretty reliant on exports — probably enough to push Switzerland into recession and deflation. And the immediate reason it took these steps was that its previous policy of capping the rise of the Swiss Franc against the Euro was about to be rendered much harder by Eurozone QE. On a deeper level, the reason it was pushed into adopting a cap in the first place was the relative ‘safe haven’ status of the Swiss Franc at a time when European policymakers had failed to resolve their own economic problems.

As the economist Charles Kindleberger argued in explaining the severity of the great recession:

“the 1929 depression was so wide, so deep, and so long because the international economic system was rendered unstable by British inability and U.S. unwillingness to assume responsibility for stabilizing it.”

One big worry today is that once again there is no obvious candidate to lead the world economy.

The world economy has changed drastically in the last 35 years.

As recently as 1990, US GDP (at purchasing power parity) was 22.5% of the global total and the rest of the G7 group of advanced economies controlled another 28.6%. In other words, a meeting of just 7 world leaders could talk for over 50% of the global economy.

That world is gone.

In 2014 the IMF estimate that US GDP was 16.2% of the global total and the rest of the G7 between them just 16%.

Against that background the kind of international economic co-operation on display at the Plaza Accord in 1985 becomes much harder.

To take just three examples of the kind problem that each state looking out for itself throws up, just look at three of the largest economies in the world right now.

One of the biggest debates in US economic policy now is whether or not to raise interest rates soon. Supports of early hikes point to falling unemployment, faster growth and worry that low rates could encourage the kind of financial bubbles that helped get us into this mess in the first place. Opponents of early rises usually point to falling inflation and still weak wage growth.

Almost absent from the US debate is the potential impact of Fed hikes on the emerging world. The so-called taper tantrum in 2013 though provides a warning as to what could happen if investors seeing higher returns available in the US decide to pull capital out of emerging countries. That could lead to serious problems as hot cash floods back to America.

Just last week the World Bank noted that interest rate rises from the Fed may ‘reveal vulnerabilities’ in some emerging economies.

Of course this argument cuts both ways, there was little policy debate in 2008 and 2009 on the (more (at least in the short term) beneficial) impact on the emerging economies of the Fed cutting rates.

Or look at Japan. Prime Minister Abe’s ‘three arrows’ of monetary easing, fiscal stimulus and structural reform are not yet having the full desired effect on the Japanese economy. But they have seriously weakened the yen. Japan benefits here in two ways — pushing up import prices has helped in the battle against deflation and Japanese exporters gain a competitiveness boost.

But yen weakness ripples throughout Asia effecting countries as diverse as Korea and Thailand.A weaker yen may be helpful to Japan but not necessarily to its neighbours.

Then there’s the Eurozone. It at least has the political structures which should allow economic policy co-ordination. But there’s very little evidence that this co-ordination is happening.

QE has been delayed by German wrangling, the policy solution favoured by Mario Draghi (monetary easing, structural reform and more fiscal space in the European periphery) has been stymied by politics and six years on there is still a fundamental disagreement across European capitals on exactly what caused the crisis (was it fiscal irresponsibility or current account imbalances?).

In provocative essay in 2012 Mark Blyth & Matthias Matthijis argued that European’s fundamental economic problem was the failure of Germany to act as a true hegemon would. Two and half years on, it feels like there was some truth in this.

We don’t live in Kindleberger’s 1930s, but we are living through an era in which an old hegemon (in his case Britain, in the modern world the US) is seeing its economic weight decline.

Historically these kinds of changes are often associated with a turbulent global economy.

This time, in that regard at least, looks no different.

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