Editorial Notes

[Editorial Notes] Is globalisation dying?

Trade protection and immigration control is just as damaging to US as the ‘America First’ policy is to their societies. However, a hard look at the data on the gains from globalisation over the last few decades tells us a somewhat different story.
By IASToppers
October 23, 2019


  • Introduction
  • Globalization in advanced economies
  • Conclusion

Is globalisation dying?

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  • A number of mainstream economists argue that the rising trend of de-globalisation led by advanced economies (AEs) like the US is responsible for the economic slowdown.
  • Capital Economics (CE), an economic think tank, estimate that roughly a third of global per capita income growth since 1990 has been due to productivity enhancements via globalisation. However, most of these benefits have accrued to the emerging markets (EMs) and not to the advanced economies (AEs).

Globalization in advanced economies

  • Although Trade and investment flows with the external world have helped AEs reconfigure their entire structure of production, it has a minor impact on subsequent productivity gains.


  • Instead, gains in per capita income in AEs have depended largely on technological change. As the technological improvement has decreased over the last decade, per capita income growth also decreased.
  • The deceleration in technological change could be due to the low investment and innovation and low gains from the internet revolution that is yet to be replaced by artificial intelligence.
  • The losses in advanced economies due to globalisation can be seen in their labour market that resulted in the slow progress of low skilled but employment rich sectors like textile and the support economies that grew around it.
  • These job losses are caused by cheaper imports from China. Competition from China caused direct manufacturing job losses of 1.5 million between 1999 and 2007.
  • In spite of the Technological change, stagnation of blue collar incomes gave rise to the growing difference between skilled white collar earnings and blue collar earnings. However, some believe that inequality and decreasing labour share are due to technological change and not due to the globalization.
  • There are also the social costs of globalisation that ultimately manifest in economic costs. The intensity of America’s opioid addiction crisis results in contraction of economic opportunities that globalisation has brought. The fight against this epidemic involves large federal and state expenditures on health.


  • There is a need to build a strategy for a more balanced industrial economy with a mix of high- and low-end jobs. The biggest losers from de-globalisation would be the emerging markets (EMs) who have benefited the most from globalisation. Hence, they have to make an alternative strategy.


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