Oil prices threaten globalization

When Thomas Friedman published his bestseller The World Is Flat in 2005, it portrayed a new world of global markets where historical, regional and geographical divisions are becoming increasingly irrelevant.

It was a very different world. US productivity still seemed relatively solid and global growth was strong.

The price of oil did climb from $10 to $95 between 1999 and 2007, but this did not have an adverse impact on global growth. Things changed this year. When the price of oil soared to $140, many saw the increases as a harbinger of a new energy shock.