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Globalization Resets
Article

Globalization Resets

The Retrenchment in Cross-Border Capital Flows and Trade May Be Less Dire than it Seems

Sebastian Mallaby
Finance & Development Magazine, 2016
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Editorial Rating

8

Qualities

  • Innovative
  • Eye Opening

Recommendation

The benefits of global trade and investment have driven success stories in Asia, Latin America, Africa and other areas. Even in the United States, where Donald Trump made protectionism a major part of his political platform, trade has added more than $1 trillion annually to national income since World War II. This concise article from journalist Sebastian Mallaby makes an intriguing argument that the post-2008 retreat from the previous dizzying levels of capital flows and trade is a structural transformation of the world economy rather than a reversal of globalization. getAbstract recommends his novel perspective to anyone interested in understanding globalization’s many nuances.

Summary

The end of the Cold War crumbled long-standing blockades to economic exchange. The world experienced an astoundingly rapid “era of globalization” from 1989 to 2007: The flow of international capital increased from 5% to 21% of global GDP, trade vaulted from 39% to 59% of the world’s output, and 25% more people migrated across national borders than before. But the 2008 financial crisis brought the global movement of capital and traded goods to a screeching halt, followed by a severe retrenchment. Whether that pullback signifies a “deglobalization” or a “globalization reset” ...

About the Author

Sebastian Mallaby is a senior fellow at the Council on Foreign Relations and the author of The Man Who Knew: The Life & Times of Alan Greenspan.

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