Alamos Alliance XXXIII: A New Global Economic Order? Questions and Concerns

The Archbridge Institute has recently become a co-organizer of the Alamos Alliance. The conference is a premier private academic meeting that was started by Arnold Harberger more than 30 years ago and it is a high level, off the record conference of some forty-five American, Latin American, Canadian and other international professionals, professors and policy makers, who meet on an annual basis to discuss issues regarding macroeconomic stability, open global trade, economic development, property rights and sustained growth, as well as the appropriate public policy instruments to achieve them.

The event has been very successful in attracting outstanding scholars and top current and former political leaders to exchange views on key issues of policy and political economy which is why we thought it could become a crucial way for Archbridge to connect with influential academic and policy audiences. Former attendees and participants include Milton and Rose Friedman, James Q. Wilson, John Taylor, Robert Mundell, George Schultz, Vernon Smith, Bill Easterly, Allan Melzter, Anne Krueger, Don Brash, and many others. And more recently, Phil and Wendy Gramm, John Cochrane, Charles Calomiris, Doug Irwin, Dierdre McCloskey, Charles Calomiris, Carmen and Vincent Reinhart, Kevin Murphy, Luigi Zingales, and Francis Fukuyama have had the opportunity to join the program.

Our program in 2026 took place in San Antonio, Texas and our Chief Economist Justin Callais who attended the event put together the following report on the proceedings of the event.

You can access the full program and participant list here. 

You can read a Spanish version of the following executive summary here.

Executive Summary

Alamos Alliance XXXIII: A New Global Economic Order? Questions and Concerns

San Antonio, Texas

The 33rd edition of the Alamos Alliance conference took place in San Antonio, Texas, from March 5 to 7, 2026. The central theme was A New Global Economic Order? Questions and Concerns, bringing together renowned economists, policymakers, and experts from various fields to discuss the current policy challenges facing the global economy.

Key topics included the future of the U.S. dollar as the world’s reserve currency, the role of institutions, rule of law, and deregulation in promoting development, the unraveling of the postwar multilateral trade order, and, in a wide-ranging closing keynote, the relationship between economics and religion. The conference also examined Argentina’s ongoing reform experience under President Javier Milei and the deepening institutional pressures facing Mexico.

The conference agenda featured key sessions such as:

• Central Banks, Currencies, and the Future of the Dollar: Agustín Carstens, Vittorio Corbo, and James Bullard examined the structural underpinnings of dollar dominance, the risks posed by U.S. domestic policy, and the role of private currencies and stablecoins in the international monetary system.
• Institutions, Rule of Law, and Development: Santiago Levy, Federico Sturzenegger, and Simeon Djankov analyzed Mexico’s productivity crisis, Argentina’s deregulation drive, and the political economy of reform across countries.
• The Triumph of Economic Freedom: A breakfast session in which Phil Gramm and Donald Boudreaux discussed their recent book on the enduring importance of economic freedom.
• Global Trade Under Fire—Now More than Ever? Anne Krueger, Esteban Rossi-Hansberg, and Antonio Ortiz Mena assessed the collapse of the multilateral trading order, the role of national security exemptions, and the implications for Mexico.
• Economics and Religion: Robert Barro delivered the closing keynote, presenting new empirical findings on trends in religious participation across countries and the effects of major institutional shocks on religious attendance.

The first session, titled Central Banks, Currencies and the Future of the Dollar, began with a presentation from Agustin Carstens, who organized his remarks around three questions: what it takes to sustain a reserve currency, whether the U.S. dollar will maintain its preeminence, and what to make of private currencies and stablecoins.

Carstens began by tracing the foundations of dollar dominance in the postwar period. The United States made a deliberate effort to establish the dollar as the denomination of global trade, constructing networks in payments and finance that reinforced this position. The arrangement rested on a set of pillars: global leadership and alliances, openness to trade and capital flows, strong institutions—particularly the Federal Reserve—and sheer size of the overall economy. These conditions enabled the dollar to remain central to the international monetary system even after the United States abandoned the gold standard.

The concern, Carstens argued, is that the United States has spent the last fifteen years inflicting self-inflicted wounds on those foundations. He identified four major fault lines. First, attacks on the independence of the Federal Reserve have damaged trust in U.S. monetary institutions, with negative spillover effects for the rest of the world. What gives money its value are the institutions behind it and trust in the system. Lack of independence threatens both the institutional environment and trust in the system.

Second, fiscal deficits are out of control, and monetary accommodation has swelled the Fed’s balance sheet to a degree that itself constitutes currency risk. While inflation has remained relatively low year over year, the size of the balance sheet provides evidence of future fiscal instability. Furthermore, the weaponization of payment systems through sanctions has a clear downside: the emergence of alternatives, which threatens the status of the world’s reserve currency as sanctioned countries seek such options. Using these sanctions too often provides incentives for sanctioned countries to develop their own reserve currency.

Third, the commitment to open trade has eroded sharply; as trade networks form without U.S. participation, so does the incentive to denominate those transactions in dollars. If the United States becomes less involved in trade negotiations, then alternatives can arise. Fourth, there is a lack of understanding about the role of providing liquidity of the U.S. dollar in the world. The U.S. should realize that this is not just to help other countries but has the added benefit of dollar continuance in the world economy.

Despite these pressures, Carstens did not forecast a collapse. The dollar’s decline, he suggested, will be gradual and depend heavily on how quickly alternatives develop. The euro remains constrained by the EU’s limited political cohesion, and China faces its own structural obstacles. As for stablecoins, Carstens was skeptical: private money has historically failed to fulfill the three core functions of currency, and stablecoins lack the institutional backing, including lender-of-last-resort capacity, that gives money its value as a world reserve currency.

Vittorio Corbo organized his remarks around five core messages: that price stability is the foundation of macroeconomic stability; that institutions with clear mandates are essential to achieving it; that fiscal discipline is a prerequisite for sustainable price stability; that the dollar remains central to the international payment systems even as the euro and renminbi pose structural challenges; and that the main risk to dollar dominance comes from within—specifically from pressures on Federal Reserve independence and from a rising debt-to-GDP ratio.

Corbo drew on Chile’s experience to illustrate what sound institutional design looks like in practice. Chile established central bank independence in 1989 and introduced a structural fiscal rule in the early 2000s targeting a cyclically adjusted surplus. A 2008 fiscal responsibility law formalized this framework, and a 2024 reform added a prudential debt-to-GDP target. The widespread use of inflation-indexed contracts has reduced the incentive to erode public debt through inflation. The result was a rapid decline in inflation—from nearly 30 percent to 3.5 percent by 2025—though Chile’s fiscal sustainability has nonetheless deteriorated over the last decade, with structural deficits reaching 3.6 percent of GDP against a target of 1.6 percent. Corbo warned that Latin America more broadly faces similar risks: weak fiscal positions create pressure on central banks to reduce interest rates or introduce financial repression, increasing the likelihood that inflation expectations become unstable.

James Bullard offered a complementary perspective focused on the theory of currency competition and the implications of private currency issuance. Bullard noted that the proliferation of cryptocurrencies is pushing the United States toward a non-uniform currency arrangement—a state of affairs that has existed historically but has typically been viewed as unsatisfactory because of the volatile exchange rates it generates. In equilibrium, there is a role for alternatives for a simple fact: private currencies provide an avenue for transactions that would not occur otherwise.

Bullard argued that the central challenge for any currency, public or private, is the credibility of commitments about future issuance. The value of money is ultimately a function of trust in the institutions behind it; technology, on its own, does not resolve this problem. He reviewed historical evidence from Thomas Sargent on hyperinflations following WW1, drawing on work showing that they ended not when price levels fell but when governments made credible commitments to future policy. Problems of stabilizing currency value are not itself mitigated by commodity-backed or alternative/cryptocurrencies. Under the gold standard, for example, the government had to name the exchange rate between notes and gold, and that rate could be altered, leading to future uncertainty about the nature of commodity-backed currency.

He applied this logic to contemporary debates about crypto. The core question, he emphasized, is: how credible are promises to limit future issuance? Without convincing answers, private currencies cannot substitute for the institutional anchors that give sovereign money its value. At the global level, Bullard noted that exchange rates between major currencies (the yen-dollar relationship, for example) have often been more volatile than economic fundamentals would predict. Currencies can fluctuate excessively, which attracts speculative trading and alters real capital flows. Because governments can and do devalue in the system, this forces investors to price in devaluation risk. Overall, though, volatile exchange rates provide an interesting dilemma: it is in part a distraction from the real business at hand, which is using the price system to judge and assign value to goods and services. The addition of private currencies to this system risks exacerbating instability rather than resolving it.

The next session, Institutions, Rule of Law and Development, was led by Santiago Levy, Federico Sturzenegger, and Simeon Djankov.

Santiago Levy opened the session by returning to the basics of growth accounting to explain Mexico’s lackluster economic performance. Not only has Mexico’s total factor productivity growth slowed relative to other neighboring countries but has actually fallen since 2000. At face value, this should not be the case: investment rates as a percentage of GDP and growth of labor force have outpaced the U.S. The reason for this, Levy argues, is the formal-informal segmentation of the economy. 55 percent of workers and almost 90 percent of firms are informal, and this has not changed since NAFTA. 10% of all firms are formal with an average size of 26.8 workers, the other 90% of firms that are informal have an average workforce of just 2.2. Furthermore, performance between firms in the informal and formal sectors has diverged more heavily since NAFTA. This matters because capital and labor deployed in formal firms generate much higher value than the same inputs in informal ones, yet the institutional environment pushes firms toward informality.

Three institutional features drive this outcome. First, labor regulations create significant costs for formal employment. Salaried, formal employees have stringent dismissal regulations, housing fund contributions, minimum wages, and unions. Informal companies do not have to follow those guidelines. Second, the tax code contains discontinuities, particularly in VAT rates and corporate income tax regimes, that create effective ceilings on firm size, eliminating the incentive to grow beyond a certain threshold. Third, contract enforcement is costly and uncertain for small firms, where roughly 95 percent are not registered as limited liability entities. The result is a productive structure dominated by tiny informal firms: in Mexico, 6 million firms produce a GDP of $1.8 trillion; in the United States, 8 million firms produce $30 trillion.

Levy closed by cataloguing recent institutional deterioration: judicial reform that has weakened the independence of the courts, the elimination or reduction of autonomy of regulatory bodies, the strengthened position of state-owned enterprises in energy, and growing uncertainty about the USMCA. Large firms can adapt through private arbitration and international partnerships; only 1% of firms, though, are “large” (with 50 or more workers), and the vast majority of Mexican businesses cannot due to their informal structure.

Federico Sturzenegger presented the Argentine case, drawing on his direct experience designing and implementing Milei’s reform program. He organized his remarks around five themes: fiscal policy, economic freedom, deregulation, trade liberalization, and state transformation.

On fiscal policy, Sturzenegger described how public expenditure was cut by 30 percent almost immediately upon Milei’s taking office, producing a sustained government surplus. The economy subsequently grew by more than 6 percent. Poverty rates, which initially rose from a starting point of 41.7 percent, have since fallen to 30.2 percent, and inflation has dropped sharply to 32.4 percent annualized. Since Milei’s time in office started, they have moved from 145^th in economic freedom to 106^th.

On deregulation, Sturzenegger argued that the key insight is that regulations are fixed costs for firms, which systematically pushes small businesses into informality. Informal firms are low-productivity firms relative to formal, similar to the arguments from Levy.

Eliminating regulatory barriers therefore has a direct channel to productivity gains. He also pointed to a necessary feature of regulation in Argentina: most of the regulations in place are due to regulatory capture rather than public interest. He offered several examples: prohibitions on satellite internet access—which had been maintained by a lobbying media conglomerate—were repealed; rental market deregulation produced more permanent rentals, fewer temporary ones, and lower rents; deregulation of airport markets allowed mid-size cities to receive commercial flights for the first time. By removing these government-sponsored monopolies and colluding interest groups, the price of many goods has fallen, such as drinks and clothing. In each case, the regulation in question served concentrated special interests at the expense of the broader public.

Simeon Djankov addressed the political economy of reform, drawing on a database of 3,635 reform attempts across countries. The dataset of reforms includes any reform proposed by legislative, executive, and judicial branches; they also specify the type of form, like technical (agency), legal (legislative process and signed by executive), and administrative (ministerial decree).

The presentation was framed around a classic debate: whether reform is impeded by entrenched coalitions that protect their privileges, as Mancur Olson argued, or whether it proceeds when it generates sufficient efficiency gains to enable broad coalitions of winners, as the Coasian tradition suggests.

The data, Djankov argued, point to a more nuanced answer that depends on the number of veto players in a system. Success rates for reform are 85 percent in rich countries and 55 percent in poor ones—a finding more consistent with the Coasian view. Richer countries also attempt more reforms.

Judicial reforms are the least likely to be attempted but are disproportionately more successful relative to legislative and administrative ones. Technical reforms are most successful, followed by legal and then administrative. However, legal was the most attempted, followed by administrative and then technical. Another interesting pattern was that the countries that attempted the most reforms were those that were the most often successful.

Finally, Djankov presented a pattern of post-reform outcomes which shows that business environment improvements are greater in poorer countries, meaning that while they reform less frequently, each successful reform yields a greater return.

The second day of the conference started with a breakfast session featuring Donald Boudreaux and Senator Phil Gramm, who presented the main findings from their book “The Triumph of Economic Freedom: Debunking the Seven Great Myths of American Capitalism.” The seven myths were as follows: the idea that the Industrial Revolution impoverished workers, the success of the Progressive Era regulations, the notion that the Great Depression was a failure of capitalism, trade hollowed out American manufacturing, deregulation caused the 2008 financial crisis, income inequality in the U.S., and that poverty is a failure of America’s capitalistic system. Each chapter combines historical narrative, graphical evidence, and summaries of studies that argue why these ideas are myths. According to the authors, capitalism in America has made its citizens better off, not worse.

The final third session, Global Trade Under Fire–Now More than Ever?, featured three presentations from Anne Krueger, Esteban Rossi-Hansberg, and Antonio Ortiz Mena.

Anne Krueger opened the session with a review of the postwar trade liberalization project and its present unraveling. She traced how exposure to international competition had been a crucial engine of productivity improvement for most countries, and how the institutions built around GATT and then the WTO had sustained progressively lower tariff rates—averaging 2.5 to 4.5 percent among advanced economies—over decades. However, recent pushback from traditionally rich countries is often labeled “national security” exemptions, which have been abused in her view.

Against this background, Krueger assessed the current U.S. administration’s trade posture. The second Trump term has been marked by large, volatile tariffs and arguments—which she found inconsistent—that these measures would simultaneously increase manufacturing employment, reduce inflation, and strengthen the U.S. fiscal position. She points out a main example: steel. Job losses in manufacturing jobs that use steel have dropped as tariffs on steel have increased the cost of production for U.S. firms, making them less profitable and pushing them to decrease employment.

She also highlighted an important legal constraint: the U.S. Supreme Court’s pushback on executive tariff authority has limited the president’s bargaining leverage, since any concessions secured are subject to reversal through congressional action. Before the decision, the President was able to use bargaining power with neighboring countries (like South Korea and Japan, for example) to drop their tariffs on the U.S. The current tariff regime, she noted, is explicitly temporary.

Esteban Rossi-Hansberg situated the current moment within a broader theoretical framework. The convergence toward a low-tariff global system around the year 2000 was, he argued, always fragile—a cooperative equilibrium that required a hegemon willing to internalize global welfare rather than maximize its own unilateral payoff.

The United States’ share of world GDP has declined, not necessarily due to lack of growth in the U.S., but instead a result of other countries shifting from emerging to developing to developed economies.  However, as the share has declined, the incentive to sustain that role has weakened, and its incentive to deviate by imposing optimal unilateral tariffs has strengthened—particularly when tariff revenue has high political value and retaliation can be managed.

Rossi-Hansberg was pessimistic about the prospects for a return to multilateralism: the same coordination failures that made the multilateral system hard to sustain in the first place will make it hard to rebuild. He drew a parallel to climate policy, where a stable cooperative arrangement requires simultaneous participation by the United States, Europe, and China—a condition that has so far proved elusive.

Another main concern comes from what he called the “national security externality”, where private agents act as though geopolitical risk is irrelevant since governments are assumed to reach a bargaining position. But this lack of action results in such an externality where one can justify industrial policy as well as reshoring and “friend-sharing”, or can be used to justify sanctions that further deteriorate trade cooperation.

On the implications for Mexico, Rossi-Hansberg offered a mixed assessment. Mexico stands to benefit from some aspects of the international trade system’s fragmentation, as companies seek to nearshore production. This is contingent, however, on local trade agreements with the U.S. and Canada, primarily, holding. If the U.S. has tariff rates lower on Mexico relative to other countries, then Mexico can stand to potentially benefit due to their preferential access. However, if tariffs become broader and the spread between Mexico and the rest of the world shrinks, Mexico stands to be harmed substantially.

Antonio Ortiz Mena analyzed the political economy of the current international trade environment, asking whether the emerging order constitutes a coherent new equilibrium or simply disorder. He examined U.S. trade policy across five domains: energy, food security, critical minerals, labor, and geopolitics, and found significant internal inconsistencies in each.

On energy, the administration’s policies have made investment in Canadian energy more difficult, even as Canada has historically been one of the United States’ most important suppliers. Despite this being a sector where regional block trade makes more sense from an economic and national security standpoint, the investment difficulties have made this partnership suffer. On food security, U.S. and Mexican agricultural production is highly complementary, but trade tensions have undermined the stability of the sectors, particularly in Mexico due to crime and cartel power, that provide that complementarity. On critical minerals, the United States lacks the refining capacity it would need to reduce dependence on Latin America and Canada, which has much of the available resources and capacity. However, the adversarial approach to trade between these countries leads to some cause for concern. In the labor market, similarly, the U.S. does not have the labor from within for agriculture and construction. Since regional block dynamics are worsening and will lead to a further decrease in production, there are reasons to believe this downturn should be reversed to maintain production capabilities.

The overarching theme of Ortiz Mena’s analysis was that U.S. policy is often working against its own stated strategic objectives, creating openings for rivals while weakening the regional integration that would most effectively serve American national interests.

Robert Barro delivered the conference’s closing keynote, presenting new empirical work on long-run trends in religious participation across countries. The methodological centerpiece of the research was a novel approach to extending the time series available from standard survey data.

Standard surveys on religious participation, such as the World Values Survey and the International Social Survey Program, cover at most a few decades. Barro and his coauthors exploited a simple but powerful insight: respondents can be asked how frequently their parents attended religious services when the respondent was a child. By combining survey respondents’ current ages with this retrospective question, it is possible to construct estimates of parental religious attendance extending back to the 1920s. The resulting dataset allows for analysis of long-run secular trends and the effects of major historical shocks on religious participation.

The broad findings were as follows. Religious attendance in the United States has declined in terms of both monthly and weekly attendance, though rates remain higher than in most other wealthy countries. Among Western European nations, classic secularization patterns are pronounced. Germany and France have fallen below 10 percent weekly attendance by 2020, with Ireland the notable exception. Similar trends emerge for Scandinavian countries. Post-Soviet countries show a different pattern: attendance fell under communism and has flattened, rather than recovered, since 1990. Latin American countries are relatively stable across time, as are Muslim-majority countries, though the latter vary widely by country. South Korea stands out as one of the few countries to show a marked increase in religious participation.

Barro then turned to two event studies. The first examined the effects of Vatican II (1962–1965), which introduced major changes to Catholic practice, such as: masses conducted in vernacular languages and facing the congregation, greater ecumenism, abolition of Friday abstinence from meat, and discussions of birth control. The research finds large cumulative decreases in Catholic attendance following Vatican II—approximately 14 percentage points—consistent with the hypothesis that liberalizing reforms reduced the distinctiveness of Catholic practice as a club good and opened challenges to papal authority. The second event study examined the end of communism across 16 countries and found, perhaps surprisingly, essentially no effect on religious attendance, though individual country trajectories (such as Bulgaria, Georgia, Latvia, and Russia) increased; other countries (like Croatia, Estonia, and Poland) declined in attendance.

Alamos Alliance XXXIII concluded with a sober but not despairing assessment of the global economic landscape. Across sessions, participants returned to a common set of concerns: the erosion of institutional credibility—in central banks, in trade frameworks, in domestic rule of law—and the difficulty of reform in the face of entrenched interests and short political time horizons. The dollar’s position, the multilateral trading system, and the productive capacity of emerging markets like Mexico all face headwinds rooted less in economic fundamentals than in political choices.

Yet the conference also surfaced reasons for measured optimism. Argentina’s experience demonstrates that significant fiscal and regulatory reform is achievable even in countries with long histories of instability. The empirical evidence on reform success suggests that persistence matters: countries that attempt reform repeatedly are more likely to succeed. And the deep economic integration between Mexico and the United States creates structural incentives for cooperation that may ultimately prove more durable than current tensions suggest.