Prof Emanuele Bracco

Economic sanctions reduce output but are rarely decisive. Their effects are modest, uneven, and slow, hitting poorer, less diversified economies hardest. Financial sanctions are more disruptive but costly for sanctioning countries and encourage long-run adaptation. Sanctions signal resolve and constrain options, but they rarely deliver rapid political change.

China’s export-led model is unusual: it dominates both low- and high-value manufacturing while prioritizing self-sufficiency over domestic consumption. This strategy reshapes global competition, challenges advanced and emerging economies, and heightens geopolitical tensions, increasing the risk of protectionism and realignment of global economic blocs amid trade conflicts.

AI may be reversing globalization’s inequality effects. According to Gustavo de Souza (Federal Reserve of Chicago, 2025), AI adoption in Brazil increases jobs and reduces wage gaps by automating office tasks while boosting low-skilled factory work. A one-standard-deviation rise in AI use lifts employment up to 7% in three years, shifting risks from factory workers to “digital middle managers” and making the future of work potentially fairer.