Deglobalization

After a period of very rapid growth, in the years leading up to the Global Financial Crisis, world trade then stagnated. “Hyper-globalization” gave way to “slowbalization”. To some extent, this was inevitable. The motors of hyper-globalization – China’s integration into the world trading system, new technologies, and the reduction in barriers to trade – led to one-off rises in the level of trade but were never going to boost its growth rate permanently. More recently, however, global trade may also have been affected by a re-emergence of protectionism and rising barriers to trade. Tariffs and subsidies have risen sharply, and economists worry about the risk of fragmentation. In this course, we will seek to understand the political causes and economic effects of these trends. The course begins with some of the histories, going back to the 19th century but concentrating more on the pre-GFC “hyper-globalization.” We will look in some detail at the origins and consequences of the UK’s exit from the EU (“Brexit”). The pandemic is also examined as a quasi-experiment in cutting the supply of traded goods. The final section considers the more recent rise in trade barriers in the context of slower economic growth, rising nationalism, and strategic competition between super-powers. Instructor: Ben Broadbent