In the Era of Trump, Globalization Is Slowing, but That Is Only Temporary

http://www.independent.co.uk/news/world/americas/in-the-era-of-trump-globalization-is-slowing-but-that-is-only-temporary-a7232236.html

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Globalization will not be stopped, although it may slow for a time. Columnist Martin Wolf of the Financial Times addresses this issue and claims "Globalization has at best stalled."

He cites four pieces of evidence to describe the slow down. First of all, he writes that according to a study produced by the Peterson Institute for International Economics, "the ratios of world trade to output have been flat since 2008, making this the longest period of such stagnation since the second world war."

Second, according to Global Trade Alert, which covers international commerce, "the volume of world trade stagnated between January 2015 and March 2016, though the world economy continued to grow."

Third, "the stock of cross-border financial assets peaked at 57% of global output in 2007, falling to 36% by 2015."

Fourth, "inflows of foreign direct investment have remained well below the 3.3% of world output attained in 2007, although the stock continues to rise, albeit slowly, relative to output."

The post-World War II climate in the world has, in general, thrived as globalization has progressed.

As a consequence, this "era of globalization has seen the first fall in global inequality of household incomes since the early 19th century...Between 1980 and 2015, average global real income rose by 120%."

But as in the past, when growth is sluggish, discontent increases. Cries of income and wealth inequality have risen dramatically as globalization has slowed. Issues of national sovereignty and self-interest have become more prominent.

When the economy is growing robustly, people get along better and have a sunnier view of what might be possible for them. When economies stagnate, the world becomes a zero-sum game. People are dissatisfied with things as they are and resentment grows about what others have.

The dilemma is that people and governments face a situation in which the things that will contribute to a resumption of globalization are exactly the things that discontent targets.