Mon Jul 22nd, 2013 at 04:47:00 AM EST
A couple of days ago Krugman posted a very interesting graph on his blog:
Unprecedented Globalization - NYTimes.com
A couple of weeks ago I posted a chart showing the long-term trend of world trade in manufactures relative to world production. The paper I took the chart from, however, only went up to 2000. And I decided to update it for the next edition of Krugman Obstfeld Melitz. And it's pretty striking:
You see the interwar trade decline; the growth in world trade after World War II didn't return to 1913 levels of globalization until around 1970. But since then, trade has grown incredibly. Interestingly, the big tariff cuts in GATT rounds had already happened; what we're looking at here is trade liberalization in developing countries plus containerization, and the emergence of massive vertical specialization (iWhatevers being made in many stages in different countries).
front-paged by afew
I think it's worth recording because it has two useful properties:
- It shows how globalization now really is different in scale to the pre-WW1 state everyone (particularly The Economist) is fond of quoting as a touchstone reference to why globalization isn't something to be concerned with.
- There's an interesting correlation between this graph and the economic problems that came to light in the 70s and proved to be the impetus for politicians to become enamoured of the neoliberal movement.
Previous 70s diaries for reference:
European Tribune - So what really happened in the 70s?
It's been apparent for quite a while that the core myths of neoliberalism sit on the foundation of a neoliberal/right-wing narrative of what happened in the 1970s.
European Tribune - The 70s redux...
Benjamin Studebaker has published an interesting blog