Showing posts from April, 2019

The beginning of deglobalization or just a blip?

Bloomberg economist Carl J. Riccadonna said the current “trade war” was more a “trade skirmish” and that globalization was just slowing. Michael Pettis, professor of finance at Peking University’s Guanghua School of Management, in contrast, believes that we have entered a phase of deglobalization. Read more

While I am quite persuaded by the data that deglobalization currently is a real world phenomenon with which we have to deal, others are clearly not. Lund and Tyson (2018) use a provocative title ‘Globalization Is Not in Retreat’ to point out that the slow-down of world trade in physical goods may be due to increasing e-commerce and digitalized services. By implication the traditional metrics of globalization show a decrease due to this substitution effect. Constantinescu et al. (2016) ask the question, ‘Does the global trade slowdown matter?’ Yet another disbeliever Bordo (2017) adds: ‘The Second Era of Globalization is Not Yet Over’ arguing that we are witnessing a slowdown of gl…

Deglobalization and the pharmaceutical industry

Deglobalization, Industry 4.0, and biosimilars may change the trade routes
Several changes in the market are affecting current pharma trade routes, but the combined effect is difficult to predict. For many years, pharmaceutical companies have located manufacturing to developing countries to reduce labor costs and other production costs. There is still lot of collaboration in the industry, where for example raw material may be manufactured in China, shipped to India for further development, and the finished products will then be shipped to for example the US. However, there is also the opposite trend of deglobalization, where companies are relocating manufacturing back to the home market.

There are several drivers behind the deglobalization trend. Next generation manufacturing, or Industry 4.0, are terms that describe the new developments in manufacturing with a high degree of automation and process control. This radically reduces manpower requirements, which means that labor costs are…

Trump and the Weaponization of International Trade

Jack Thompson, Center for Security Studies (CSS) on There is a degree of truth in Trump’s critique of globalization. Economists debate the scale of the problem, but major trade deals such as the North American Free Trade Agreement (NAFTA), and the impact on the US manufacturing sector of China’s integration into the international economic system – the so-called China Shock – have had a significant impact on key sections of the economy. The United States probably experienced overall net growth because of trade liberalization – millions benefited from these changes, and a majority of voters view globalization in mostly positive terms – but many Americans saw their lives change for the worse. The consequences for these people have been stark: they have endured falling income levels or long-term unemployment, decreased life expectancies, and hometowns that have, in some cases literally, crumbled around them.

China, Energy and the Era of deglobalization

In the era of deglobalization, a much more security conscious China is likely to adjust its attitude towards foreign supply of strategically important commodities, with profound implications for its energy and environmental policy making in the years to come. (Columbia Global Centers | Beijing for a public lecture on China's energy transformation in the era of deglobalization, featuring CGEP Fellow Jianjun Kevin Tu.)

Deglobalization and remittances

In a world roiled by populist sentiments and anti-immigrant tendencies, the world’s well-trodden migration corridors, which follow remittance corridors one to one, are under strain. It would seem fitting (if tragic), that a world hellbent on retrenchment and deglobalization, is not only raising barriers to entry to the more than 260 million economic migrants around the world, it is also squeezing remittance flows with costly transfer fees. Read more on risk cooperative
Remittances are interesting because these flows are based on decisions by individuals and households, rather than firms or governments. It is a good additional indicator since it is motivated by considerations other than FDI or official flows including development aid. Remittances did not suffer a major collapse but clearly a slow down since the start of the Great Depression is also visible here. So also for this component of economic globalization we see a structural break. Read more in chapter 2

should we be afraid of deglobalization


Les populistes n’ont pas inventé la démondialisation


L’Europe à l’ère de la démondialisation

Les histoires de la Grande Dépression des années 1930 et de la Grande Récession post 2008 racontent fondamentalement un transfert d'hégémonie. Elles sont dans une large mesure similaires. Ce qui fait la différence? L'Europe. see blog on Telos