Abstract
Mark Twain is reputed to have remarked that history does not repeat itself, but it often rhymes. 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. In this essay, I explore three questions that this similarity raises. Does globalization inherently foster domestic or international 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 policy approaches and institutions that complement and support globalization likely to arise?
This is a preview of subscription content, log in via an institution to check access.
Source: Catão and Obstfeld (2019)
Source: Catão and Obstfeld (2019)
Source: Migration Data Portal based on UN Department of Economic and Social Affairs Population Division data; accessed December 3, (2019)
Similar content being viewed by others
Notes
I use this phrase in a somewhat different sense than Romer (1994) did.
Espinoza et al. (2019) provide evidence that both trade and financial openness compromise a government’s ability to tax capital. On the OECD proposals, see https://www.oecd.org/tax/beps/public-consultation-document-secretariat-proposal-unified-approach-pillar-one.pdf and https://www.oecd.org/tax/beps/public-consultation-document-global-anti-base-erosion-proposal-pillar-two.pdf.
References
Alesina A, Glaeser EL (2004) Fighting poverty in the US and Europe: a world of difference. Oxford University Press, Oxford
Berger S (2003) Notre première mondialisation: Leçons d’un échec oublié. Seuil, Paris
Bourguignon F (2015) The globalization of inequality. Princeton University Press, Princeton
Catão L, Obstfeld M (2019) Introduction. In: Catão L, Obstfeld M (eds) Meeting globalization’s challenges: policies to make trade work for all. Princeton University Press, Princeton
Colantone I, Stanig P (2019) The surge of economic nationalism in Western Europe. J Econ Perspect 33(Fall):128–151
Espinoza R, Ostry JD, Zhang X (2019) Globalization, redistribution, and the size of government. Discussion paper 14137, Centre for Economic Policy Research, November 2019
Feis H (1930) Europe the World’s Banker 1870–1914: an account of European foreign investment and the connection of world finance with diplomacy before World War I. Yale University Press, New Haven
Frieden J (2008) Will global capitalism fall again? Bruegel Essay and Lecture Series
Hayek F (1937) Monetary nationalism and international stability. Longman, Green, London
Hobson JA (1902) Imperialism: a study. James Pott & Company, New York
Huberman M, Meissner CM (2010) Riding the wave of trade: the rise of labor regulation in the golden age of globalization. J Econ Hist 70(September):657–685
Ikenberry GJ (1992) A world economy restored: expert consensus and the Anglo-American Postwar settlement. Int Organ 46(Winter):289–321
Irwin DA (2019) The missing Bretton woods debate over flexible exchange rates. In: Lamoreaux N, Shapiro I (eds) The Bretton woods agreements. Yale University Press, New Haven
Lenin VI (1917) Imperialism: the highest stage of capitalism [Импepиaлизм, кaк Bыcшaя Cтaдия Кaпитaлизмa]. Zhizn i Znaniye Publishers, Petrograd
O’Rourke KH (2018) Economic history and contemporary challenges to globalization. Working paper 25364, National Bureau of Economic Research, December 2018
O’Rourke KH, Williamson JG (1999) Globalization and history: the evolution of a nineteenth-century Atlantic Economy. MIT Press, Cambridge
Obstfeld M (2019) Globalization and nationalism: retrospect and prospect. Keynote address at the Italian Economic Association Annual Meeting, Palermo, Italy, October 26, 2019. https://www.mauriceobstfeld.com/recent-papers
Obstfeld M, Taylor AM (1998) The great depression as a watershed: international capital mobility over the long run. In: Bordo M, Goldin C, White E (eds) The defining moment: the great depression and the American Economy in the twentieth century. University of Chicago Press, Chicago
Obstfeld M, Taylor AM (2017) International monetary relations: taking finance seriously. J Econ Perspect 31(Summer):3–28
Padoa-Schioppa T (2010) Markets and government before, during, and after the 2007–20XX crisis. Per Jacobsson Lecture, Bank for International Settlements, June 27, 2010
Pritchett L (1997) Divergence, big time. J Econ Perspect 11(Summer):3–17
Robbins L (1937) Economic planning and international order. Macmillan, London
Rodrik D (1998) Why do more open economies have bigger governments? J Polit Econ 106(October):997–1032
Rodrik D (2000) How far will international economic integration go? J Econ Perspect 14(Winter):177–186
Romer CD (1994) The end of economic history? J Econ Educ 25(Winter):49–66
Schoenmaker D (2013) Governance of international banking: the financial trilemma. Oxford University Press, New York
Subramanian A, Kessler M (2013) The hyperglobalization of trade and its future. Peterson Institute for International Economics, working paper no. 13-6, July 2013
Tooze A, Fertik T (2014) The world economy and the great war. Geschichte und Gesellschaft 40(April–June):214–238
World Bank (2019) Trading for development in the age of global value chains. World Development Report 2020. World Bank Group, Washington
Acknowledgement
I thank Marion Fourcade for helpful suggestions.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
This paper draws on Obstfeld (2019).
Rights and permissions
About this article
Cite this article
Obstfeld, M. Globalization Cycles. Ital Econ J 6, 1–12 (2020). https://doi.org/10.1007/s40797-020-00121-4
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s40797-020-00121-4