Business cycles are generally viewed as having been less correlated during the Bretton Woods period, 1950-1971. This column discusses findings from a new database of quarterly industrial production for 21 countries from 1950 to 2014 based on IMF archival data. As it turns out, business cycle synchronisation was as strong before 1971 as it was after (up till the Global Crisis began in 2007). Moreover, deeper financial integration tends to de-synchronise national outputs from the world cycle, at least in non-crisis periods.
Eric Monnet, Damien Puy, 02 May 2016
Michael Spence, Danny Leipziger, James Manyika, Ravi Kanbur, 04 November 2015
The global economy is not working properly. This column argues that to overcome suboptimal results, global aggregate demand must be expanded, the gap between excessively large pools of capital and huge unmet infrastructure needs must be bridged, and finally, the distributional downside of rapid technological advances and global integration must be addressed. Change will come only when a global vision is put forth, coupled with political will.
Gary Clyde Hufbauer, Cathleen Cimino, 17 March 2014
In an op-ed for the New York Times, Paul Krugman calls the Trans-Pacific Partnership (TPP) “No big deal”. This column looks at Krugman’s main arguments against the TPP. First, Krugman suggests spending political capital on domestic initiatives, and not on the TPP. Second, he argues that the pay-off from TPP will be trivial since tariffs are already low. The column points to a larger message in Krugman’s op-ed, namely that the era of globalization and policy-driven liberalisation is over.
Kevin Hjortshøj O’Rourke, Ronald Findlay, 10 March 2008
Globalisation is fundamentally political, not technological. This is the lesson from a new book tracing 1000 years of international trade history. Here the authors use lessons from the past to identify challenges for globalisation in the 21st century.
Anna Maria Mayda, Kevin Hjortshøj O’Rourke, 12 November 2007
The creed: Trade creates winners and losers, but the winners win more than the losers lose, so governments should boost public support for trade by creating ex ante mechanisms that share the pains and gains. Here is some evidence that it actually works.
Karolina Ekholm, Karen-Helene Ulltveit-Moe, 30 July 2007
In recent years, the skill premium in the US manufacturing sector is declining and the skill intensity increasing. The authors of CEPR DP6042 argue that this pattern can be linked to globalization and the rise in offshoring.