Pandemic has killed globalisation, says Carmen Reinhart

Discussion in 'Economics' started by themickey, May 21, 2020.

  1. themickey


    Jill Ward May 22, 2020 – 12.41am

    New York | The incoming chief economist of the leading multinational organisation seeking to help integrate developing nations into the world economy said the era of globalisation is probably dead.

    "Without being melodramatic, COVID-19 is like the last nail in the coffin of globalisation," Carmen Reinhart, a professor of international finance at the Harvard Kennedy School, told Bloomberg TV's Alix Steel and Michael McKee.

    "The 2008-2009 crisis gave globalisation a big hit, as did Brexit, as did the US-China trade war, but COVID is taking it to a new level."
    The spread of the coronavirus has prompted governments to shut borders and raise barriers against exports of food and even health products. Some nations are seeking to redirect production of key supplies back home after factory shutdowns frayed global supply chains.

    "COVID has left countries feeling that they need to be self-reliant in a way we haven't seen before," said Ms Reinhart, who was named World Bank chief economist on Wednesday. "We are going to see much more inward tendencies."

    The blow against globalisation will cut global growth and be particularly damaging for developing countries, especially those reliant on exports, she said. The World Trade Organisation is expecting trade volume to fall "precipitously" in the first half of this year.
    "The last time we had anything like that, you have to go back precisely to the Great Depression, where we had that kind of collapse in a single year of trade," said Ms Reinhart. A renewed trade war with China would also have a "very negative impact," she said.

    Ms Reinhart is known as co-author, with Kenneth Rogoff, of the 2009 book This Time Is Different: Eight Centuries of Financial Folly. The book made them go-to resources on the history of government defaults, recessions, bank runs, currency sell-offs, and inflationary spikes.

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  2. bone

    bone ET Sponsor

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  3. SunTrader


    1. China - willfully withholding information.

    1a. Chumpie (and most of the U.S. media right, left and center) - willfully ignorant.
  4. BAT31


    The global economy has a short memory. Once this pandemic passes, it will be business as usual. Comparative advantage still has value. First world corporations won't abandon third world labor markets and start making widgets for $5, when third world labor markets can make them for $0.5.
    SPYAlgoTrader, jys78 and virtusa like this.
  5. Turveyd


    Gone is the Star Trek 1 world all working together, it's going to divide and make people crossing borders wary as they don't want to risk a repeat of this.

    Going to be a rough decade!! :(
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  6. BAT31


    Lately, I have been watching NTD News and Australia's Sky News. If the accounts are accurate, China is a really BAD actor in the world.
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  7. bone

    bone ET Sponsor

    The worst are the American consumers and American corporations wanting the cheapest goods no matter where they’re made and despite the geopolitical implications.

    I am by no means a Trump fan and I did not vote for him but he was right about China I’ll have to concede that.

    yc47ib, Ayn Rand, jys78 and 3 others like this.
  8. Trump and everybody knew about the city of wuhan lockdown the city in jan 25 and knew about the virus.
    there was no withholding information.

    Trump and many countries assumed it was jus another sars 2003 or 2009 H1N1 and was just severe flu and didn't care about it.

    The problem is US and many countries had no plan to deal with a virus outbreak Taiwan has no new cases cause they had experience with sars 2003 and had stockpiles of mask. and ventilators

    No plan=== shortage of mask? and gloves.

    and even today there is shortage N95 mask for health care workers
  9. globalization is that a company has 'global market'

    prior to free trade, many countries ban foreign companies from competing in gov't contracts. with free trade agreements it prohibits banning of foreign companies from selling in their markets.

    like tarriffs and preferential tax incentives to domestic based companies.

    it's america that is benefit from globalization as 50% of S$p500 companiees or american corporate earnings come from foreign markets.

    and reason for the strong USD.
    #10     May 21, 2020