New Delhi, May 10 -- The wave of globalism, finance and unfettered markets that defined the last four decades may be subsiding, ushering in a new era of national sovereignty and state-led industrial policy, Nuvama said in a research note. The brokerage firm argues that the world is facing a "crisis OF the system" rather than a cyclical downturn, with the US-led USD-system showing signs of strain and a new synthesis of sovereignty and democracy likely to replace hyper-globalisation.

According to Nuvama, Dani Rodrik's political trilemma explains the last 150 years of world order. Under the Gold Standard, hyper-globalisation and national sovereignty prevailed while democracy was limited. The Bretton Woods era saw democracy and sovereignty t...