Ester Faia, Sébastien Laffitte, Maximilian Mayer, Gianmarco Ottaviano, 17 June 2020

Understanding the effects of automation and offshoring on labour markets and growth has been a significant topic of interest. This column argues that automation and offshoring fundamentally affect the matching between firms and workers and do so in contrasting ways. It predicts that automation will increase firms’ and workers’ job selectivity and decrease employment, while offshoring will have the opposite effect. Empirical evidence as well as a quantitative model support this hypothesis and provide a mechanism of technological change typically missed in standard neoclassical reasoning.

Youngmin Baek, Kazunobu Hayakawa, Kenmei Tsubota, Shujiro Urata, Kenta Yamanouchi, 03 June 2020

Anti-globalisation sentiment has been spreading around the world in recent years. Since trade liberalisation is one of the representative characteristics of globalisation, investigating who benefits from it, and to what extent, can be an important starting point in analysing the causes of anti-globalisation sentiment and promoting liberalisation. This column explains how the rent from trade liberalisation, in the form of tariff reductions, is distributed among foreign producers, wholesalers, and consumers by investigating the tariff pass-through for each player.

Anna Stansbury, Lawrence H. Summers, 02 June 2020

Since the early 1980s, the US has seen a falling labour share and slow wage growth for typical workers, while measures of corporate valuations and measured markups have increased. A number of papers have argued that increasing monopoly or monopsony power can explain these trends. This column argues instead that the decline in worker power in the US economy is a more compelling explanation for recent macro trends than a broad-based rise in monopoly power.

Hans-Joachim Voth, 26 May 2020

The Covid crisis has prompted the question of how much mobility a globalised world can and should have. This column, taken from a VoxEU eBook, breaks the question down into two elements: Is a massive restriction of mobility desirable? And is it feasible at all? The free exchange of goods and capital does not have to be restricted; only very few diseases are transmitted by contaminated goods. On the other hand, while the free movement of people also contributes to the advantages of globalisation, it is far less important for production. Severe restrictions may well be desirable and justifiable, bringing to an end a half-century of ever-increasing individual mobility.

Charles Goodhart, Duncan Needham, 16 May 2020

The COVID-19 crisis presents a multi-faceted challenge to policymakers. A combination of declining commodity prices, the rise in unemployment, and emergency state spending are all set to create challenging economic conditions, even as the pandemic itself subsides. This column argues that one mechanism that could help control long-run inflation levels is the issuance of long-dated gilts. This would also help to protect the young and unborn generations from the threat of resurgent inflation, which could lead to a massive rise in their future debt service requirements. 

Kemal Kilic, Dalia Marin, 10 May 2020

In the wake of the Global Crisis, uncertainty in the world economy led many firms to reassess their business models. Rather than relying on global supply chains, an increasing number of firms invested in robots, which prompted a renaissance of manufacturing in industrialised countries. This column argues that changes in the world economy due to COVID-19 make a V-shaped recovery from the coming recession unlikely. Instead, COVID-19 will accelerate the process begun after the Global Crisis by encouraging firms to re-shore activity back to rich countries.

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’.

Adnan Seric, Deborah Winkler, 28 April 2020

The COVID-19 pandemic has exposed the vulnerabilities of global value chains. In response to supply chain risks, global lead firms have relied on Industry 4.0 technologies as well as reshoring parts of production. This column explores the potential impacts of these developments on the breadth and depth of global value chains. Automation and reshoring allow for more flexible adjustment to changing demand and the mitigation of supply-side risks. Ultimately, the implications of automation on development will depend on both the types of foreign inputs sourced as well as the relationship between robots and labour.

Michael Blanga-Gubbay, Paola Conconi, Mathieu Parenti, 28 April 2020

The number of regional trade agreements has grown significantly in recent years. There is an ongoing debate about the winners and losers from these agreements, as well as the political economy that shapes them. This column uses extensive data on lobbying expenditures in the US to analyse how firms exert political influence for free trade agreements. It shows that virtually all lobbying firms are in favour of such agreements. A theoretical model is used to explain this finding and further characterise the intensive margin of lobbying expenditures.

Olivier Accominotti, Marie Briere, Aurore Burietz, Kim Oosterlinck, Ariane Szafarz, 10 April 2020

For many years, globalisation was on the march, bringing with it the increased risk of financial contagion effects. The Global Crisis reversed this expansion and highlighted the vulnerabilities intrinsic to the globalised international economy. This column takes a historical approach to the debate, analysing how patterns of globalisation and contagion have changed over time. The patterns also suggest that the ongoing Covid-19 pandemic is likely to cause another enormous ‘stress test’ for globalisation, forcing firms and nations to limit traveling and trade, perhaps leading to a reevaluation of the international system.

Simone Arrigoni, Roland Beck, Michele Ca' Zorzi, Livio Stracca, 24 February 2020

Governments are increasingly confronted with the task of preserving the positive effects of increased global integration while also managing their manifold side effects. This column looks at the effects of globalisation on inflation and financial stability and the role for central banks. It concludes that central banks are far from immune from the forces of globalisation and should continue to evolve and reassess their role and instruments in a changing world.

Anna Maria Mayda, Christopher Parsons, Han Pham, Pierre-Louis Vézina, 20 January 2020

While resettled refugees in the US historically exhibit remarkable success, this column shows that refugees also foster development to their origin countries through the mechanism of foreign direct investment. A 10% increase in refugees in a given commuting zone causes outward FDI flows to increase to their countries of origin, 10 to 15 years after having taken refuge, by 0.54%. Decisions made primarily for humanitarian reasons in developed host nations thus yield economic benefits for some of the world's poorest nations in the medium run.

Lubos Pastor, Pietro Veronesi, 12 December 2019

Economic anxiety and insecurity are often cited as drivers of populism, so why has populism emerged over the past few years in rich countries and in good times? This column, part of the Vox debate on the topic, argues that income inequality plays a role. When the economy is strong, everyone fares well but the rich fare especially well, fuelling inequality and resentment. Populism in the form of anti-globalisation may reduce everyone’s consumption, but it affects the rich disproportionately and thus appeals to many voters in richer countries. In poorer countries, however, voters are less willing to give up consumption for equality.

Italo Colantone, Piero Stanig, 10 December 2019

Populist parties tend to share an anti-establishment stance and the claim to represent ordinary people versus the elites. This column, part of the Vox debate on populism, argues that despite these similarities, populist parties are fundamentally heterogeneous and the drivers of their support tend to be diverse. It also argues that the economy and culture should be seen as tightly interrelated rather than mutually exclusive explanations for the populist surge, and that rather than being a simple ‘protest vote’, the surge might reflect a new political cleavage resulting from the contraposition of winners and losers from structural economic changes.

Pascal Lamy, 27 November 2019

Andrea Ariu, Katariina Nilsson Hakkala , J. Bradford Jensen, Saara Tamminen, 22 November 2019

Global trade in services increased six-fold between 1990-2017, representing a threat for workers but a growth opportunity for firms that source these services at lowest cost. This column examines the changes in employment composition and performance of Finnish service importers. Firms that increased imports of service inputs reduced employment of low-skill service workers but increased employment of managers. They also improved their sales, assets, and service exports, and were more likely to survive.

Guillaume Bazot, Eric Monnet, Matthias Morys, 02 November 2019

The gold standard (1880s-1913) is usually portrayed as the exemplary case of the total submission of central banks’ monetary policy to the constraints of international finance.  This column challenges this view by showing that central banks’ balance sheets stood as a buffer between their respective domestic economies and global financial markets. By contrast, autonomy was much more limited in the US, a country with fixed exchange rates but no central bank before 1913.

Caroline Freund, Alen Mulabdic, Michele Ruta, 28 October 2019

The conventional wisdom is that 3D printing will shorten supply chains and reduce world trade. This column examines the trade effects of the shift to 3D printing in the production of hearing aids. It shows that adopting the new technology in production increased trade by roughly 60% as production costs came down. An analysis of 35 other products that are increasingly produced using 3D printing also finds positive effects but suggests that product characteristics such as bulkiness can affect the relationship between 3D printing and trade. 

Michael Bordo, Mickey Levy, 18 October 2019

The history of tariffs and immigration and capital barriers provides clear lessons of the potentially sizeable economic costs of anti-globalisation policies. This column describes how the US-China tariff war and policy-related uncertainties are harming economic performance, and are also distorting the Federal Reserve’s monetary policy and undermining its credibility and independence. Tariffs and discretionary monetary policy are a toxic mix, and the authors encourage a de-escalation of burdensome barriers to trade and urge the Fed to adopt a systematic, rules-based approach to monetary policy.

Rui Costa, Swati Dhingra, Stephen Machin, 01 October 2019

Some commentators argue that globalisation is systematically connected to the real-wage and productivity stagnation seen across the developed world. This column analyses the relationship between international trade and worker outcomes in the immediate aftermath of the Brexit referendum, when the value of the sterling fell massively against other nations’ currencies. It finds that the rise in import costs from the sterling depreciation hurt wages and training. This relative decline in real earnings of workers has reinforced pre-existing real-wage stagnation; UK workers have not fared well since the referendum price rise.

Pages

Events

CEPR Policy Research