Slowing, a Bit

Regular readers of this blog will know that globalization has been one of my favourite topics. I recently received a new blog from the International Monetary Fund (IMF) in which the process, defined by the Fund as the change in the sum of exports and imports of all economies relative to global gross domestic product, is tracked over the last century and a half, the period for which robust data are available. The Fund calls this the “trade openness metric”. I found both the blog’s text and chart to be such a comprehensive, yet brief, depiction of globalization, that I decided to simply reproduce it here for readers:

https://www.imf.org/en/Blogs/Articles/2023/02/08/charting-globalizations-turn-to-slowbalization-after-global-financial-crisis

Here are some insights from the data:

1. Globalization, often thought of as a relatively recent phenomenon, was well underway during the industrialization period from 1870 to roughly the start of World War One.

2. Trade protectionist policies proliferated through the Great Depression years and World War Two, and not surprisingly, globalization slowed dramatically.

3. Post-World-War-Two, the process began a multi-decades acceleration, especially after 1980 as China and other developing economies liberalized trade policies, and after 1995 when the World Trade Organization became the arbiter of trade agreements and disputes, and capital flows surged.

4. The Fund describes a period of “slowbalization” following the global financial crisis of 2008, during which political support for freer trade has steadily declined and the pace of trade reform has slowed. As shown in the blog’s chart, however, the slowing has been relatively minor, at least to the end of 2021, when set against the historical trend.

Hats off to the IMF authors, Shekhar Aiyar and Anna Ilyina, for such s succinct description, and data depiction via a chart, of globalization.