Globalization and Nationalism: Retrospect and Prospect

CEPR Discussion Paper No. DP14990

26 Pages Posted: 28 Jul 2020 Last revised: 16 Aug 2020

See all articles by Maurice Obstfeld

Maurice Obstfeld

University of California, Berkeley; Peterson Institute for International Economics; National Bureau of Economic Research; Centre for Economic Policy Research

Date Written: July 2020

Abstract

Recent events have highlighted areas of conflict between economic integration with the outside world and the demands of domestic electorates. Historically, the tradeoffs have always become sharper in periods of crisis, such as the present. After reviewing the U-shaped progress of globalization since the nineteenth century, this essay reconsiders John Maynard Keynes's views on "national self-sufficiency" in the early 1930s. I argue that the postwar Bretton Woods system he helped to create evolved from those views as a balanced middle ground between market forces and governments' desires for domestic economic stability. The gradual erosion of that balance in favor of the market has helped produce discontent over globalization and more nationalism in politics. Enhanced multilateral cooperation in key areas offers the hope of supporting globalization while better meeting voters' aspirations. Despite daunting political obstacles to global cooperation these days, collective action challenges in areas like climate, cybersecurity, and health â?? alongside economic policy â?? are only becoming more pressing over time.

Keywords: deglobalization, Globalization, multilateralism, Nationalism, populism

JEL Classification: F52, F53, F60, N20, N40

Suggested Citation

Obstfeld, Maurice, Globalization and Nationalism: Retrospect and Prospect (July 2020). CEPR Discussion Paper No. DP14990, Available at SSRN: https://ssrn.com/abstract=3650104

Maurice Obstfeld (Contact Author)

University of California, Berkeley ( email )

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HOME PAGE: http://www.mauriceobstfeld.com

Peterson Institute for International Economics ( email )

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National Bureau of Economic Research ( email )

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Centre for Economic Policy Research ( email )

London
United Kingdom

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