Nikolaus Wolf, 11 June 2018

Roberto Duncan, Enrique Martínez García, 08 June 2018

Understanding what helps forecast inflation is important for any modern economy, but analysis remains limited in the emerging market economy context. This column presents recent findings on inflation forecasting in such economies, showing that a variant of the simple random walk model specification seems difficult to beat. The strong forecasting performance of this model can be observed even though many emerging economies have adopted a de facto or de jure inflation-targeting regime.

Pascal Lamy, 06 June 2018

Koji Ito, 03 June 2018

Support for ‘anti-globalist’ policies across the developed world suggests that many people are concerned about the impact of globalisation on employment and wages. This column examines the wage premium for exporting among firms in Japan, using linked employer-employee data to control for other factors that may affect wages. Exports and wages clearly are correlated in Japan’s manufacturing sector, especially for smaller-scale plants and firms. 

Roger Farmer, 29 May 2018

Luigi Guiso, Helios Herrera, Massimo Morelli, Tommaso Sonno, 18 May 2018

There has been some disagreement over the roots of the recent rise of populism in Europe. This column examines variations in exposure to economic shocks and in ability to react to them in different regions of Europe to show that the cultural backlash against globalisation has been driven by economic woes. In regions where globalisation was present but that have benefited economically, there has been no such backlash and the populist message has retreated. The message is clear: if one wants to defeat populism, one must defeat first economic insecurity.

Dan Andrews, Peter Gal, William Witheridge, 11 May 2018

Low inflation at the same time as rising global competition has led to a debate on the importance of globalisation for domestic inflation. This column suggests that greater participation in global value chains has placed downward pressure on inflation. The current higher level of global value chain integration may also dampen inflation by accentuating the impact of global economic slack on domestic inflation. There is a risk that stalling globalisation since the crisis, coupled with stronger aggregate demand and declining market contestability, could lead to inflationary pressures in the medium term.

Cevat Giray Aksoy, Sergei Guriev, Daniel Treisman, 08 May 2018

Attitudes toward globalisation have emerged as a new dimension of political alignment, alongside – or even instead of – the traditional left-right cleavage. This column uses data covering nearly 450,000 individuals in 118 countries over the last ten years to show that highly skilled individuals approve of their government more when high skill-intensive exports increase, but approve of it less when high skill-intensive imports rise. More generally – and contrary to the conventional wisdom – unskilled workers do not oppose imports and blame their leaders for failing to protect markets.

Giammario Impullitti, Omar Licandro, 29 April 2018

Globalisation discontents blame trade for destroying jobs and slashing wages, while its supporters rebut that trade openness generates aggregate gains that can potentially benefit all. However, assessing the gains from trade represents a long-standing challenge for economists. This column argues that that accounting for firms' innovation responses doubles the gains from trade obtained in static quantitative models.

Valentin Lang, Marina Mendes Tavares, 27 April 2018

Globalisation stirs a diverse range of sentiments and views: some credit globalisation for boosting economic well-being while others blame it for worsening inequality. This column examines the effect of globalisation on income among and within countries, and shows that globalisation is associated with income convergence across countries and income divergence within countries. Targeted redistributive policies and investments in education are needed to ensure that the benefits of globalisation are enjoyed by all.

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.

Grégory Claeys, André Sapir, 11 April 2018

It is only in the last decade that the EU has had an active policy to reintegrate workers who lost their jobs as a result of globalisation, through the European Globalisation Adjustment Fund. This column assesses the performance of the Fund and makes three recommendations to improve its effectiveness. To be more successful, the Fund should improve its monitoring and widen the scope of its usage.

Meghana Ayyagari, Vojislav Maksimovic, 25 March 2018

Recent press reports have highlighted the decline of US entrepreneurship. Using data on workers in 800+ occupations in over 1.2 million establishments, this column shows that there has been a decline not only in the number of new businesses in US manufacturing, but also in their size and quality. The proportion of cognitively demanding tasks at new firms has been declining substantially over time, pointing to a process of technological polarisation as incumbents upgrade human capital while entrants focus on low-skilled niches.

Antonio de Lecea, 14 March 2018

Some in the West argue that the emerging countries have prospered from globalisation at the expense of low- and middle-income classes in advanced countries by abusing open trade. Others in the East counter that the problem is the unfair distribution in Western countries of the benefits derived from global integration. This column argues that Europe's stance on globalisation – a combination of enforcement of a level playing field at home and abroad and a welfare state that mitigates polarisation and empowers middle classes – is capable of overcoming these zero-sum stories by reconciling higher growth with a fairer distribution of income and opportunities and a multidimensional concept of sustainability and well-being.

Lionel Fontagné, Ann Harrison, 05 March 2018

Andrés Rodríguez-Pose, 06 February 2018

Persistent poverty, economic decay and lack of opportunities cause discontent in declining regions, while policymakers reason that successful agglomeration economies drive economic dynamism, and that regeneration has failed. This column argues that this disconnect has led many of these ‘places that don’t matter’ to revolt in a wave of political populism with strong territorial, rather than social, foundations. Better territorial development policies are needed that tap potential and provide opportunities to those people living in the places that ‘don’t matter’.

Paulo Bastos, Joana Silva, Eric Verhoogen, 02 February 2018

Benjamin Faber, Cecile Gaubert, 30 January 2018

David Atkin, 02 January 2018

Richard Baldwin, Vesa Vihriälä, 19 December 2017

Despite the setbacks globalisation has faced in recent years from reactionary politics, the advent of artificial intelligence and robotisation are set to ensure its continuation. Domestic policy must therefore be designed in such a way as to reap the rewards of globalisation while avoiding its pitfalls. This column uses the case of Finland to show how this can be done. Finland has grown faster than its peers over two waves of globalisation, despite enduring substantial setbacks. In both its successes and challenges, it is an important example of the need for deliberate policies to prepare for future disruptions.

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