Globalization in retreat: Implications for the US economy compendium
|Summary
The first era of globalization ended abruptly in August 1914 with the advent of the First World War. The incipient reversal of the second era has been more gradual, at least thus far. In a five-part series of reports, which we collate in this compendium, we discuss the implications for the U.S. economy of a continued reversal of globalization.
In our view, the effects on the U.S. economy of continued reversal likely would be marginal. Economic growth may be a bit slower than otherwise, the rate of job creation in the factory sector may be a tad stronger, and inflation may be a few tenths of a percentage point higher. In short, we doubt that a reversal of globalization would be a complete game changer in terms of the U.S. economy. However, this conclusion is predicated on the implicit assumption that the pace of reversal remains gradual, and that the global economy does not completely revert to its pre-1990s form. The effects on the U.S. economy likely would be more profound if an abrupt rupture in the geopolitical environment led to a sudden collapse in the integration of the global economy.
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