Adrian Wood, 25 April 2018

Two decades ago, the economics profession concluded that trade with developing countries was not seriously hurting unskilled workers in developed countries. This column argues that the debate from which that consensus emerged came to an end prematurely. Even now, the evidence does not permit any firm conclusion about the contribution of globalisation to the economic misfortunes of less-educated people in developed countries. Had there been less consensus among economists, more might have been done, sooner, to mitigate the social costs of globalisation.

Wolfgang Dauth, Sebastian Findeisen, Jens Südekum, 21 February 2016

A common theme of recent trade theory models is that globalisation-related shocks induce worker sorting across industries, labour markets, and plants. However, there is little empirical evidence of shocks causing such endogenous mobility responses. This column explores how rising international trade exposure affected the job biographies and earnings profiles of German manufacturing workers since the fall of the Berlin Wall. Individuals are found to systematically adjust to globalisation, with a notable asymmetry in the individual labour market responses to positive and negative shocks. Critically, the push effects out of import-competing manufacturing industries are not mirrored by comparable pull effects into export-oriented branches.

Marc Melitz, Stephen Redding, 30 May 2013

Trade theory is ten years into the ‘new new trade theory’ revolution. This column reviews the new thinking and how it shifted thinking from why nations trade to why firms trade. This opened the door to documenting the impact of firm-level changes on industry productivity and national welfare.


CEPR Policy Research