Tuesday, November 18, 2014

Globalization is Recovering from a Mild Ailment - the Great Recession

I quote from an article in The Economist:
Globalisation’s advance has never been inevitable or smooth; nor, despite some backward steps since the crash, has it ended. That, at least, is the conclusion of the latest DHL Global Connectedness Index, published earlier this month.* Two economists, Pankaj Ghemawat of New York University’s Stern School and Steven Altman of IESE Business School compiled it using data from 140 countries, which account for 99% of the world’s GDP and 95% of its population. It shows that, after a big post-crisis drop, the trend of growing global interconnection resumed last year. Globalisation is back. 
There are many definitions of globalisation, and the index uses one that is fairly all-embracing. It encompasses four main types of cross-border flow: trade (in both goods and services), information, people (including tourists, students and migrants) and capital. It tracks not just the depth of international connections (how much activity crosses borders), but also their breadth (how many different borders are being crossed) and their direction (how do outward and inward flows compare).
World War I put an end to the first wave of globalization, that built on imperialism. I don't suppose people really thought that the Great Recession would end the second wave of globalization, which is based on capitalism and new technological infrastructures. 

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