Clausen Faculty Professor Maurice Obstfeld writes in his upcoming article in the Italian Journal of Economics, 2020:
“While the Global Financial Crisis of 2008-2009 was not a catastrophe on the order of World War I, there is a broad similarity in the sequelae to both of these events – a failed attempt to return to pre-trauma normalcy, followed by a process of international economic disintegration in the face of changed geopolitical realities. This similarity is history rhyming rather than repeating (in the phrase commonly attributed to Mark Twain), but it does raise three questions about possible cycles in globalization (also a theme of O’Rourke 2018):
- Does globalization inherently foster dynamics that eventually lead to political backlash?
- If so, are these dynamics inevitable, or can complementary economic policies nurture a stable globalization?
- And finally, since policies are endogenous, when are domestic policies that complement and support globalization likely to arise?
Obviously, these are very difficult questions to answer – all I will do here is offer some observations and guesses. Answers that are more complete would have to rely on rigorous and systematic analysis based on insights from a range of social sciences, not just economics.”
Access the full article on Prof. Obstfeld’s website HERE.