ABSTRACT
This chapter discusses some of the challenges that currently confront the global economy. The challenges are of different types and scales and their amenability to state or multistate solutions varies. The first of the challenges to the global trading system to be discussed relates to product quality. A second important threat to the stability of the global economy lies in the substantial imbalances in global trade. While payment imbalances were the fundamental cause of the 2008 crisis, the ineffective regulation of the large financial institutions that embody serious systemic risk has been seen as a more proximate cause. The chapter reviews in brief the genesis of the historical economic development of nation-states because there are clear parallels with the need today to increase jurisdictional scope to eliminate problems. It provides a review of the feasibility of state solutions to challenges to trade.
