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Globalization Cycles

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Mark Twain is reputed to have remarked that history does not repeat itself, but it often rhymes. While the Global Financial Crisis of 2008–2009 was not a catastrophe on the order of World War I, there is a broad similarity in the sequelae to both of these events—a failed attempt to return to pre-trauma normalcy, followed by a process of international economic disintegration in the face of changed geopolitical realities. In this essay, I explore three questions that this similarity raises. Does globalization inherently foster domestic or international dynamics that eventually lead to political backlash? If so, are these dynamics inevitable, or can complementary economic policies nurture a stable globalization? And finally, since policies are endogenous, when are policy approaches and institutions that complement and support globalization likely to arise?

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Fig. 1

Source: Catão and Obstfeld (2019)

Fig. 2

Source: Catão and Obstfeld (2019), from calculations supplied by François Bourguignon based on Bourguignon (2015)

Fig. 3

Source: Catão and Obstfeld (2019)

Fig. 4

Source: Migration Data Portal based on UN Department of Economic and Social Affairs Population Division data; accessed December 3, (2019)

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  1. I use this phrase in a somewhat different sense than Romer (1994) did.

  2. See the summary at

  3. Espinoza et al. (2019) provide evidence that both trade and financial openness compromise a government’s ability to tax capital. On the OECD proposals, see and


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I thank Marion Fourcade for helpful suggestions.

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Correspondence to Maurice Obstfeld.

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This paper draws on Obstfeld (2019).

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Obstfeld, M. Globalization Cycles. Ital Econ J 6, 1–12 (2020).

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