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.

Lucrezia Reichlin, 25 July 2019

Lucrezia Reichlin argues that in an increasingly globalised world, there is more need than ever for Europeans to work together in order to make our currencies robust, to cope with the refugee crisis, and to defend ourselves from the threat of protectionism.

Gianmarco Ottaviano, 03 July 2019

Economic geography strikes back. After a couple of decades of easy talk about the ‘death of distance’ in the age of globalisation, the promise of a world of rising living standards for all is increasingly challenged by the resilience of regional disparities within countries. As long as many people and firms are not geographically mobile – and those who are tend to be the most skilled and productive – easier distant interactions can actually strengthen rather than weaken agglomeration economies. Recent electoral trends in Europe can be understood to a surprisingly large extent from this angle. 

Nicola Gennaioli, Guido Tabellini, 06 June 2019

In recent decades, the political systems of advanced democracies have witnessed large changes, often in reaction to economic shocks due to globalisation and technology.  This column uses insights from the social psychology of groups to explain how when large shocks hit, new cleavages in society emerge. This causes individuals to shift their beliefs about themselves and others in the direction of new social stereotypes. If globalisation clusters society in a nationalist versus cosmopolitan cleavage instead of the traditional left versus right, this may dampen demand for redistribution despite potential increases in income inequality. 

Sergi Basco, Martí Mestieri, 19 May 2019

Trade in intermediates (or ‘unbundling of production') and trade in capital have become increasingly important in last 25 years. This column shows that trade in intermediates generates a reallocation of capital across countries that exacerbates world inequality in both income and welfare. Unbundling of production hurts middle-income countries but helps those with high productivity. Trade in intermediates also increases within-country inequality, and this increase is U-shaped in the aggregate productivity level of the country. 

Leonardo Baccini, Giammario Impullitti, Edmund Malesky, 17 May 2019

The recent success of China and Vietnam over the past three decades has triggered a debate over ‘state capitalism’ as a viable growth and development model. This column studies the effect of the 2007 WTO accession on the productivity, profitability, and survival rates of state-owned and private Vietnamese firms. The findings reveal that state-owned enterprises have hampered the efficiency gains brought about by globalisation. An analysis suggests that productivity gains from trade five years after WTO entry might have been 66% higher in the absence of state-owned firms.

Susan Lund, Jacques Bughin, 10 April 2019

The history of trade reflects the ongoing march of technological innovation. This column argues that despite today’s increased trade tensions, rising nationalism, and slowdown in global goods trade, globalisation is not in retreat. Instead, it is entering a new chapter that is being driven by flows of information and data, as well as technological changes that are reshaping industry value chains.

Jonathan Dingel, Kyle Meng, 06 March 2019

Climate change is expected to reshape the global distribution of productivities. In theory, shifts in the spatial structure of economic conditions will affect international inequality by altering the pattern of international trade. In practice, it is hard to identify natural experiments to causally validate predictions about global conditions. This column describes research that exploits a global climatic phenomenon to estimate the general equilibrium consequences of changes in the spatial correlation of productivities. 

Rui Esteves, 15 February 2019

A new data set compiles the history of international finance spanning a century and a half, revealing new information about globalisation, crises and capital flows. Rui Esteves of the Graduate Institute, Geneva, tells Tim Phillips what lessons it offers for policymakers today.


CEPR Policy Research