Michele Ruta, 05 May 2022

The war in Ukraine has suddenly increased geopolitical risks. This column argues that firms will respond to the shock by reassessing security-related risks, leading to changes in the structure of supply chains. But given the capital in place, the cost of searching for alternatives, and factors such as wage differentials across countries, this process is likely to be gradual rather than sudden and will affect different sectors and products differently. It will not result in a reversal of globalisation, unless it is supported by pronounced government intervention.

Eddy Bekkers, Carlos Góes, 29 March 2022

The war in Ukraine and the sanctions imposed on Russia have intensified the debate on the economic repercussions of a shift in global trade policy focus from mutual economic benefits of open trade policies to geopolitical considerations limiting interdependence. This column finds that a potential decoupling of the global trading system into two blocs – a US-centric and a China-centric bloc – would reduce global welfare in 2040 compared to a baseline by about 5%. Losses would be largest (more than 10%) in low-income regions that benefit most from positive technology spillovers from trade.

Dennis Snower, 21 March 2022

Russia’s invasion of Ukraine appears to have laid the old world order to rest. This column argues that we now stand at a crossroads. To guide us to a Benign Anthropocene that mobilises a transnational collective spirit for addressing the major global problems of our time – instead of a Toxic Anthropocene marked by deglobalisation, a collapse of global collective action, retreat into nationalisms, environmental collapse, and the rising danger of large wars – we need to ensure that the narratives underlying our actions are constructive, rather than destructive.

Peter Eppinger, Gabriel Felbermayr, Oliver Krebs, Bohdan Kukharskyy, 07 July 2021

The major disruptions to global value chains caused by the Covid-19 pandemic have prompted politicians to think about reducing the reliance on imported inputs by decoupling from global value chains. This column quantifies the welfare costs of decoupling as well as the potential gains from reduced exposure to foreign shocks. The bottom line is that decoupling does not pay off. 

Philipp Hartmann, Glenn Schepens, 12 May 2021

The 2020 ECB Forum on Central Banking addressed some key issues from the ongoing monetary policy strategy review and embedded them in discussions of major structural changes in advanced economies and the post-COVID recovery. In this column, two of the organisers highlight some of the main points from the papers and debates, including whether globalisation is reversing, implications of climate change, options for formulating the ECB's inflation aim, challenges with informal monetary policy communication, relationships between financial stability and monetary policy, how to make a monetary policy framework robust to deflation or inflation traps and the role of fiscal policy for the recovery from the pandemic.

Swati Dhingra, Rebecca Freeman, Hanwei Huang, 21 January 2021

Deep trade agreements are widespread and have taken the world beyond tariff liberalisation in goods trade. As the importance of global supply chains and the services sector increased across the world, shallow tariff reductions gave way to deeper commitments that address non-tariff barriers and behind the border barriers to trade. By matching dissagregated trade data to the universe of deep trade agreements, this column examines their impact on trade in goods and services, and quantifies their welfare impacts. Welfare gains from the commitments involved in such agreements have played a crucial role in overall welfare gains since the conclusion of the Uruguay Round. 

Douglas Irwin, 05 May 2020

The COVID-19 pandemic has led policymakers and business leaders to question whether global supply chains have been stretched too far. This column argues that the pandemic simply adds further momentum to the deglobalisation trend. The fourth era of globalisation appears to have peaked in 2008, and since then we have been in an era of ‘slowbalisation’.

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