Economic Deglobalization – From Hypothesis to Reality

Abstract

Lately, a new term is used in international economic literature, namely “de-globalization” which has already sparked off numerous debates. As expected, some economists were quick to adopt it unhesitatingly, but others have labelled it as “absurd”, “superficial”, “simple”, “anachronistic” and even “counterproductive”. In fact, there are two diverging processes opposed to each other, both worth mentioning. First – globalization – with its multiple meanings and definitions, and the second – deglobalization – which is just beginning to find a place within the confines of concepts used in international economics literature. The issue is not to treat them only as antonyms, but rather to demonstrate the causal relation between them. We consider trying to measure deglobalization as an important step in determining the true meaning of such a phenomenon, or if it is real. Also, would be interesting to find out if deglobalization is really a long lasting trend, or just a short term turn in the evolution of the world economy. Using the “globalization index” and its components as a tool in this direction could be one of the potential solutions in defining the meaning of the new and complex changes which tends to shape the international economic relations and, after all, the international business environment. Although it is admitted not being a perfect tool, it could be a starting point in studying such a vast change. Therefore, the motivation of this article is to contribute to theoretical debates that bear on this new term, given that, as in the case of globalization itself, economists have not yet reached a consensus on the definition.

Keywords: Globalization, deglobalization, international trade, foreign direct investment (FDI), economic integration

JEL Classification: F14, F23, F6, F21