Since the mid-1980s, global value chains have played a key role in globalization. They have boosted world trade, productivity and real income growth, above all in emerging economies. On the downside, they have also helped transmit shocks, including inflation shocks. Recent disruptions have shown that supply chains may lead to dependence on a few concentrated suppliers.
Yet, withdrawing from global trade would be fatal to the global economy. Instead, it is key to become more resilient by diversifying suppliers and deepening markets. Finally, the climate crisis is looming large on us today and on future generations.