Showing posts from August, 2019

Is terrorism, poverty, and refugees the dark side of globalization?

Mario Arturo Ruiz Estrada, Donghyun Park, Alam Khan, and Muhammad Tahir.  present a new model on the impact of terrorism on the deglobalization process. The channels are faster poverty expansion, largest flows of refugees, expansion of trade protectionism, and last but not least, the dramatic expansion of economic desgrowth.  This new model is entitled “The Deglobalization Global Evaluation Model (DGE-Model) ”.  The objective of the DGE-Model is to offer policy-makers and researchers a new analytical tool to study the impact of terrorism on the deglobalization process of Muslim countries. The applicability of the DGE-Model is not limited to a specific group of Muslim countries or regions, nor is it constrained by the development stage. In short, the DGE-Model is a simple, flexible and versatile tool to study the link between terrorism and deglobalization. They apply their model to three Muslim countries, namely  Syria, Iraq, and Afghanistan for  1999 to 2018, a period which witnesse

The costs of austerity: deglobalization

"Did Austerity Cause Brexit?"   CEPR Discussion Paper No. DP13846 THIEMO FETZER , University of Warwick Email: This paper documents a significant association between the exposure of an individual or area to the UK government's austerity-induced welfare reforms begun in 2010, and the following: the subsequent rise in support for the UK Independence Party, an important correlate of Leave support in the 2016 UK referendum on European Union membership; broader individual-level measures of political dissatisfaction; and direct measures of support for Leave. Leveraging data from all UK electoral contests since 2000, along with detailed, individual-level panel data, the findings suggest that the EU referendum could have resulted in a Remain victory had it not been for austerity.

The end of hegemony

"Funding the Great War and the Beginning of the End for British Hegemony"   CEPR Discussion Paper No. DP13848 MARTIN ELLISON , University of Oxford THOMAS J. SARGENT , New York University (NYU) - Department of Economics, Leonard N. Stern School of Business, National Bureau of Economic Research (NBER) Email: ANDREW SCOTT , London Business School - Department of Economics, Centre for Economic Policy Research (CEPR) Email: Britain was the richest country in the world at the outbreak of the Great War, benefitting from all the resources of an industrialised country and a large empire. Funding the war contributed to the beginning of the end for British hegemony. Financiers in London extracted a high price for lending their money to the government to pay for the supplies and munitions needed to win the war. The US extracted a similarly high price for lending to Britain during the war. Russia never paid its war debts to Britain; Fr

Zbyněk Fiala on Deglobalization 2.0

However, the fear of exaggerated globalization is also expressed by serious economic science. There is no unity, but there is a stream that speaks of the recurrence and withdrawal of globalization. One such deglobalization occurred after the Great Depression in the 1930s and the other began after the Great Recession, as Americans call the financial crisis after 2008. Peter van Bergeijk writes about it in Deglobalization 2.0, Trade and Openess . The book has just been published by Elgar Publishing and is also available in electronic form, so I could read at least a summary of the first chapter. ( HERE ) Basically, today's processes of 'deglobalization', ascribed to Trump and Brexit, were much earlier. So we see symptoms, not causes. Like all economic processes, globalization has not only revenues but also costs. In the beginning, revenues grow faster than costs. Greater openness of the economy opens up huge profits that can be partly offered to the population in the form o

it's the 1910s

It has become fashionable to compare the current rise of populism to the political developments of the 1930s and the aftermath of the Great Depression. In my view, however, investors can learn more from a comparison with the Gilded Age of the late 19thcentury and the years leading up to World War I.

Us vs. Them: The Failure of Globalism, by Ian Bremmer

For the past 40 years, globalization has promised to break down international barriers and bring shared prosperity to the developed and developing worlds alike. The so-called end of history held Western-style liberalism triumphant and heralded a new era of international cooperation. Fast forward to 2019 and the consensus seems to be rapidly unwinding. Rising populism in Europe and America, increasing geopolitical tension, and a new love of walls — both literal and figurative — threatens to usher in a new period of ‘deglobalization’. Political scientist (and head of risk consultancy at the Eurasia Group) Ian Bremmer’s latest book tries to answer the question: why is globalism failing? Why should you read it? As the scale of the global challenges facing us becomes increasingly evident, the much-maligned “Davos Elite” seems to be doubling down on Business as Usual. It is refreshing then to read a sincere critique of the problems created by globalization from an unapologetic globalist.



Lessons from the trade blocks and trade wars

"Trade Blocs and Trade Wars During the Interwar Period"   CESifo Working Paper No. 7665 DAVID S. JACKS , Simon Fraser University (SFU) - Department of Economics, National Bureau of Economic Research (NBER) Email: DENNIS NOVY , University of Warwick - Department of Economics, Centre for Economic Policy Research (CEPR), Centre for Economic Performance (CEP), CESifo (Center for Economic Studies and Ifo Institute) Email: What precisely were the causes and consequences of the trade wars in the 1930s? Were there perhaps deeper forces at work in reorienting global trade prior to the outbreak of World War II? And what lessons may this particular historical episode provide for the present day? To answer these questions, we distinguish between long-run secular trends in the period from 1920 to 1939 related to the formation of trade blocs (in particular, the British Commonwealth) and short-run disruptions associated with the trade wars of th