Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared at Project Syndicate.
Some new problems have afflicted the economy in the last year. Two examples come from the US: blockages in supply chain logistics and a critical shortage in infant milk formula. One problem applies to the EU even more than to the US: energy scarcity due to sanctions against Russian fossil fuel exports. And one now applies almost everywhere: inflation.
Some have associated these four problems with what is said to be excessive dependence on international trade, that is, with globalization. Deglobalization, fragmentation, reshoring, friend-shoring, decoupling, and resilience have become familiar buzzwords. The feeling is that individual countries would not have been so exposed to shocks if they had been more self-sufficient.
The argument goes
Keep reading this article on Econbrowser Blog - James Hamilton & Menzie Chinn.