Read on Twitter
This is a really excellent piece by @MESandbu arguing, rightly, that globalisation did and does not stop governments taking measures to prepare for a pandemic, and that openness, particularly the movement of ideas, is a fundamental part of the solution: https://www.ft.com/content/49a7c20a-72a2-11ea-95fe-fcd274e920ca
It made me think about future trade trends post-crisis (this is all pure speculation):
Taking @BaldwinRE's point that the one big lingering constraint on globalisation is the time-cost of moving people round the globe, I wonder if the COVID-19 experience of working from home, and relying more on zoom, Skype etc, will speed up people's adaptation to new tech and ...
Reduce the pull of geography/gravity on trade in services, for example. Facilitating long distance trade and services provision.
But there are lots of reasons to think that we are about to witness a contraction of supply chains:
In all likelihood the trade policy response to COVID-19 will lean protectionist. See @SimonEvenett's excellent work: https://twitter.com/SimonEvenett/status/1245347003095269376?s=20
In all likelihood the trade policy response to COVID-19 will lean protectionist. See @SimonEvenett's excellent work: https://twitter.com/SimonEvenett/status/1245347003095269376?s=20
I think also other factors that'll serve to pull supply chains closer 2 final point of sale in coming years:
- Policy response to climate change
- Technological change(3d printing etc)
- Median wages levelling out internationally(offshoring often driven by labour cost arbitrage)
- Policy response to climate change
- Technological change(3d printing etc)
- Median wages levelling out internationally(offshoring often driven by labour cost arbitrage)
There are also issues around consumer preference in rich countries (becoming more 'socially' conscious etc).
Anyhow, I could be wrong about lots of this, but some trends to look out for.
Anyhow, I could be wrong about lots of this, but some trends to look out for.
