Europe’s post-crisis recovery has been disappointing in comparison with the USA. But lower rates of inequality are staving off populism and bolstering support for globalisation. With the USA an increasingly unpredictable partner, the EU must address internal imbalances and build alliances to defend the multilateral order.
The arrival of China as an increasingly significant setter of global standards may be uncomfortable for India but is near-inevitable and needs to be planned for.
This brief reviews the main features of the recent globalization, attempts to explain its persistence over the centuries and why it is likely to persist in the indefinite the future, examines the causes and prospects of the new protectionism, and concludes by drawing policy implications.
The general political mood on both sides of the Atlantic seems to suggest declining public support for globalisation, but people in the EU increasingly see globalisation as an opportunity for economic growth. This shift in public opinion coincides with improved economic conditions.
What’s at stake: at odds with the conventional wisdom of constant factor shares, the portion of national income accruing to labour has been trending downward in the last three decades. This phenomenon has been linked to globalisation as well as to the change in the technological landscape - particularly “robotisation”. We review the recent literature on this issue.
It seems increasingly likely that President Trump will govern according to the values of his campaign. On trade, this might lead to major disturbances in the global rules-based order. The EU needs to decide how it will react, and it needs to decide fast.
What’s at stake: According to some, 2016’s political turmoil shows that the so-called “losers” of globalisation are striking back. There is, however, little agreement on how government should respond to this challenge.
Have competition authorities kept up with globalisation? Geographic market definition is one of the most pressing issues.
What’s at stake: The prevailing narrative for the rise of anti-establishment politicians is that advocates of integration vastly underestimated the plight of globalization’s losers.
What’s at stake: The success of presidential candidates Donald Trump and Bernie Sanders has had bloggers wondered whether the backlash against globalization is eventually getting political traction.
The potential effects of global integration on inflation dynamics, and whether this could affect the ability of central banks to fulfil their mandates.
This Policy Contribution reviews the impact of globalisation on inflation dynamics, and it analyses whether and how this affects the ability of central banks to influence inflation.