Friday, 16 March 2018

Deglobalisation 2.0

A new blog series on deglobalisation with Peter van Bergeijk as gueast editor is appearing at BLISS

gobalisation or deglobalisation?

Google scholar hits date accessed March 16 2018

A discussion between webeditors about the proper spelling of the word deglobalization or deglobalisation stimulated some research that reveals that spelling matters and that an internet search should recognize this. On the brink was incidentally launched at the top of the deglobalization wave

Saturday, 10 March 2018

Role of uncertainty now also confirmed at micro economic level

Economic and Policy Uncertainty: Export Dynamics and the Value of Agreements

Jeronimo CarballoKyle HandleyNuno Limão

NBER Working Paper No. 24368
Issued in March 2018, Revised in March 2018
NBER Program(s):International Trade and Investment 
We examine the interaction of economic and policy uncertainty in a dynamic, heterogeneous firms model. Uncertainty about foreign income, trade protection and their interaction dampens export investment. This can be mitigated by trade agreements, which are particularly valuable in periods of increased demand volatility. We use firm data to establish new facts about U.S. export dynamics in 2003-2011 and estimate the model. We find a significant role for uncertainty in explaining the trade collapse in the 2008 crisis and partial recovery in its aftermath. Consistent with the model predictions, we find that the negative effects worked (1) through the extensive margin, (2) in destinations without preferential agreements with the U.S. (accounting for over half its trade) and (3) in industries with higher potential protection. U.S. exports to non-preferential markets would have been 6.5% higher under an agreement—equivalent to an 8% foreign GDP increase. These findings highlight and quantify the value of international policy commitments through agreements that mitigate uncertainty, particularly during downturns.

Tuesday, 30 January 2018

unpacking the possibility of deglobalisation

Finbarr Livesey argues that he interpretation of the global economy has been framed as an inevitable journey towards ever greater integration—a story of hyper-globalisation. This article discusses the nature of manufacturing to understand whether this interpretation holds and to investigate the possibility of deglobalisation at the level of physical goods trade in the coming decades, and what that may imply for other non-physical elements of globalisation.

Tuesday, 23 January 2018

On the Brink of Deglobalization Again (contribution to special issue on deglobalization CJRES)

This article provides an empirical analysis of the disruption of (neo)classical/liberal globalisation
during the Great Depression and the Great Recession, identifying challenges to
existing knowledges and approaches, in particular the mainstream analysis that studied the
Great Recession in isolation, treating it as a special case and ignoring political covariates of
deglobalisation processes. The econometric analysis (an unbalanced panel of 31 countries
in the 1928–1932 and 128 countries in 2008–2012) does not find an impact from the level of
development on deglobalisation. The manufacturing import share is significantly associated
with stronger deglobalisation (this effect is stronger in the 1930s than in the 2000s). The
political system is highly significant in both 1930s and 2000s, but the sign of its impact is
opposite. In the 1930s, autocratic rule and dictatorship are associated with stronger deglobalisation;
in the 2000s, democracy is associated with stronger deglobalisation.

link to article

Friday, 20 October 2017

O Rourke on the trade collapses

KEVIN O'ROURKE, University of Oxford
In this paper, I offer some preliminary comparisons between the trade collapses of the Great Depression and Great Recession. The commodity composition of the two trade collapses was quite similar, but the latter collapse was much sharper due to the spread of manufacturing across the globe during the intervening period. The increasing importance of manufacturing also meant that the trade collapse was more geographically balanced in the later episode. Protectionism was much more severe during the 1930s than after 2008, and in the UK case at least helped to skew the direction of trade away from multilateralism and towards Empire. This had dangerous political consequences. 

Sunday, 13 August 2017

Has globalization has its day (interview in Economia july/augustus 2017, pp. 12-13)

Are we on the brink of deglobalization? International organizations, such as IMF and OECD, point out that world trade is no longer performing its role as an engine of economic growth. They note the global trade slowdown that seems to end to the process of increasing openness that was a key characteristic of the halve century that preceded the world trade collapse in 2008/9.  Importantly the official forecasts of IMF and OECD are optimistic in the sense that they assume that the policy errors of the 1930s can be avoided, in particular the political twin-sins of isolationism and protectionism. Current developments are sobering. America is to be made great again, the (dis)United Kingdom will divorce itself from everything that smells like Brussels and on the European Continent self-congratulations on fending of extreme nationalist parties disable politicians to see the underlying problem. Yes we are on the brink of deglobalization