Richard Baldwin

Richard Baldwin

Professor of International Economics at the Graduate Institute, Geneva;
President of the Centre for Economic Policy Research, London; and
Editor of the policy portal VoxEU.org

Location Switzerland

Activity

  • Thanks. And don't forget that i was telemigraing into your country by giving this course on line!
    The best way to predict the future is to know a lot about the present!

  • Well that's one view; i don't think things are ever well enough organised to say "the West did this or that" - I view history as driven by individual struggling to improve their situations. Unfortunately, that often hurts others, but it is still outcome of disparate motives, not some grand plan. In my view ...

  • Thanks. Indeed we all learned from the great comments which brought is a much wider range of views than I'd ever be able to cover myself.

  • Exactly right! Trump and Brexiteers are trying to fight with last-war's policies.

  • Trump's trade war is a strange thing; it's bad policy, ill-informed and based on outdated thinking (basically he and his advisers - who i met in Davos in January this year - think globalisation is how it used to be before the New Globalisation.
    But that said, it is bad policy that is incompetently implemented!
    Bad policy + incompetency = unintended...

  • Hi, Well the facts show a different view; just take the reduction in child deaths
    https://ourworldindata.org/child-mortality

  • Hi
    Good catch. Should be "Buy low, sell high"

  • Hi, good question.
    The data i used is from a famous economic historian, Angus Maddison, who estimated the GDPs. Here is the web site that gives all the details and all the data. There is an ongoing effort to improve the estimates.
    https://www.rug.nl/ggdc/historicaldevelopment/maddison/

  • In my view, it is a process controlled by G7 firms to a very large extent; now, of course, Chinese and Indian companies are doing the same thing.
    I do think geography matters due to the high cost of face-to-face and the continued need for meetings.
    In the book I list the other nations and justify the selection based on growth in share of world manufacturing...

  • Thanks. Some of to giving away of knowhow is done on purpose. I give a few examples in the book showing how many of the companies help their supplier become better.

  • 1) There is always been "industrial espionage" and now it is happening on line as well.
    2) Most of the knowledge transfers are done explicitly by the companies themselves - it is not theft, it is a business strategy. They want to combine high-tech with low-wages in China and thus be able to be more competitive in there markets.

  • Hi, Two things. 1) Many companies and countries (not just Trump admin) believe that China is forcing private companies to transfer knowhow as the 'price' of being able to make money in China; 2) Even without these Chinese government policies, the G7 companies were applying their firm-owned technology in China.
    So all this is about knowhow crossing borders...

  • Growth in income per person requires more output per person; to get more output, workers need more capital, better training, or better technology. Since both capital and training face diminishing returns (without an innovation, further investment, at some point, starts to be not worth it, and it stops). Innovation is what keeps output per worker rising....

  • Hi Etienne
    Ahh! Good point; the axis titles got cut off (they are there in the book ...). Here is what should be the titles of the vertical axes;
    Graphic 7 = Per capita industrialisation (UK=100 in 1900)
    Graphic 8 = Share of world GDP
    Graphic 11 = Share of world manufacturing GDP

  • 1) Debt is an issue if it gets too big and especially if it is denominated in a foreign currency - that is the source of many Emerging Market crises. Devaluation makes paying off the debt harder.
    2) GDP/pop is indeed deeply flawed, but provides a rough indication. We can do much better but not when looking at many countries and many years as the same...

  • Colonialism did have something to do with it; for example Britain forbade textile manufacturing in the US when it was a colony.
    But more broadly, it was an outcome of competition. As Europe industrialised, it realised scale economies and innovations that made it hard for India and China to compete. That meant they produced less and thus enjoyed lower scale...

  • My short answers:
    1) Yes in a geographical sense; no in an economic sense.
    2) I think European domination of the globe in the 18th and 19th centuries would have been much less extreme. China was WAY ahead of Europe at the time in terms of technology. Have a look at Admiral Zheng He's exploits https://en.wikipedia.org/wiki/Zheng_He

  • Very good point. I've read a couple views of why the did it. Many stressed the "Palace Politics" rather than it was necessary for unity.

  • Those who don't understand history are condemned to repeat it. If Trump had more understanding of trade conflicts in the past and the sort of mistakes that declining global powers have made in the past, we might not be facing a global trade war ..

  • Good point. Another thing that always bothered me is the ethnocentric background to the word "discovery" - as if when Europeans find an advanced civilisation in MesoAmerica, it is a "discovery" of something new. We can say the first movement of humans into the Americas was a discovery, but after that it is just exploration by one civilisation.

  • Good points! It was the Age of Discovery that put the 'global' in globalisation - before that the "Old World" was thought to be the whole world but humans living in and around the four original clusters of civilisation.
    And China? Well its unlikely the Brit & French would have been able to set up all those Asian colonies, and Japan and Korea might have come...

  • Indeed, "modern" is us useful word since its relative.

  • A very diverse set of words! Reflects the diversity of globalisation and the perspectives on it from around the world. Generally globalisation is viewed as a good thing in emerging markets, less so in advanced economies. But from 1820-1990, it was the other way round. We'll work how/why, we can explain the flip in attitudes. (Spoiler: the New Globalisation...

  • Special welcome to teachers!

  • _
    HELLO and WELCOME one and all!
    Right now is an exciting/frightening time for globalisation. Please follow me on Twitter - I tweet many times a day about globalisation issues and retweet things i see as especially interesting.
    There may be, this week, major news about a US-EU trade skirmish which could turn into a trade war. Since the same can be said in...

  • Your both right. The first unbundling is production and consumption. the Second unbundling about production.

  • The iron law of globalisation is that the gains are paired with pains. A wise government adopts complementary domestic policies that help share the gains and pains. We look at this more in future weeks. It is really THE critical issue.

  • Hi, I think i'm being misunderstood here. A thought-experiment is a way of gaining a better understanding of underlying factors. If you don't "simplify to clarify" you'll lose sight of what is driving what. Especially when it comes to globalisation it is easy to get lost in the anger, outrageous, and injustice that is today overflowing the media (much of it...

  • Why bitter? If you want a full definition of globalisation all you have to do is read the many books I mention. You could start with Joe Stiglitz's "Making Globalisation Work" - that's 350 pages, and then Dani Rodrik's "Globalisation paradox", and the more recent book by Stephen King "Grave new world: The end of globalisation and the return of history" (250...

  • :-)
    Thanks for catching this.

  • This can and does happen in countries with 'too big' cities - Read this short essay on why some cities are too big. https://voxeu.org/article/are-world-s-megacities-too-big
    It is a hard problem for governments. For example, Brazil moved its capital to a new city in the jungle, Brazilia, to reduce over agglomeration on the coastal cities.
    The French...

  • Hi, please read this tweet chain I did after talking to US trade officials at Davos - they are also worried about deficits.
    https://twitter.com/BaldwinRE/status/957169741789048832
    And watch this, FB Live session from Davos where i explain this (from about 2 min).
    http://graduateinstitute.ch/events?detail=events/corporate/2018/facebook-live-richard-baldwin-on

  • Richard Shayler: "I do see that ICT is removing the information asymmetry and so arbitrage / smuggling opportunities but institutional barriers remain."
    The asymmetric lobbying power is a constant, but ICT is, I agree with you, changing the technology of organisation. One classic example is the unbelievable amount of social blowback the EU-Canada trade...

  • Abraham: "it would be good to have some conclusions on some of the debates". If only! They call it a social science because we cannot run laboratory experiments to confirm or reject hypotheses. We are stuck with one version of history and precious little data on that!
    And in any case, the key to this course is to stimulate your thinking and open minds to new...

  • Hello
    I came across this excellent site on global inequality while researching my new book. The interactive chart (2nd one down) is my favorit.
    https://ourworldindata.org/global-economic-inequality

  • 3/3 Africa, the world’s poorest continent, is expected to be the worst performing region in GDP-per-capita terms in the period to 2022, growing even more slowly than developed countries, threatening to extend its long decline in relative wealth terms, as the second chart shows. Share this graphic “It’s really not what we like to see. We would like these...

  • ….
    2/3 “It feels like [the slowing of convergence with middle-income countries] has come a lot earlier in their development cycle than would be expected.” Between 2003 and 2016, a GDP-weighted basket of 32 lower-income frontier countries drawn up by Exotix enjoyed annual average growth 0.8 percentage points above that seen in a GDP-weighted basket of eight...

  • FROM FT.COM today:
    1/3 Economic growth in low-income frontier countries is no longer expected to outstrip that in middle-income emerging markets. The move threatens to end hopes of convergence between poor and middle-income countries, leaving more than 1.5bn people trapped in relative and potentially absolute poverty.
    It also calls into question the logic...

  • Here is a recent article from a UN agency (UNUWIDER )on measurement difficulties for absolute poverty.
    There is no single set procedure for estimating absolute
    bit.ly/1qdLg24

  • Ooops. Try this one: https://wits.worldbank.org/trade-visualization.aspx or this onehttps://comtrade.un.org/labs/

  • IMHO
    trade and international investment provide a nation with opportunities, but these will lead to gains AND pains.
    As Pascal Lamy (ex Head of WTO) says: "Trade is painful because it works, and it works because it is painful".
    That means open trade policies should be matched with complementary domestic policies to create a view in the domestic society that...

  • Some good points, but which nations have the hardest time keeping the social fabric solid? Those who are closed to trade, or those who are open to it?
    Here is an interactive graphic where you can see which countries are the most open and you can judge yourself whether openness seems correlated with domestic disintegration.

  • i agree that it could all go wrong, but i'd argue that things are different now. The last few decades of production offshoring has rendered nations more dependent on trade for PRODUCTION, not just cheap CONSUMPTION. Neither the US, Germany, nor Japan could make cars with importing parts. That is way Trump is having troubles implementing his anti-trade campaign...

  • This is a good point. Income is only one thing. We should not think that poverty is a thing of the past - its not - but there has been lots of progress that we should acknowledge and applaud.

  • 5. Here is the UN report on MDGs of which cutting extreme poverty in half was one. It shows you that there is a consensus globally on the amazing progress. http://www.un.org/millenniumgoals/2015_MDG_Report/pdf/MDG%202015%20rev%20(July%201).pdf
    This is due to the fact that since about 1990, the biggest, poorest nations have been growing quite fast. Although...

  • 4. On higher income thresholds.
    There is also a rising 'global middle class' defined as people with over $10/day (which is where families start buy modern consumer goods, and improving diets to income more protein, etc)
    Here is a good BBC piece reviewing some evidence - there is even a snappy video!
    http://www.bbc.com/news/business-22956470

  • 3. On the data. Here is a study focusing just on India (which has some of the best data in the developing world) https://voxeu.org/article/revisiting-poverty-reduction-india-60-years-data This broadly confirms the conclusion of great progress.

  • Few reactions
    Their is a lively debate among development specialists about how to measure poverty and where to put the line, the $1.25 was part of that UN Millennial Development Goals which were endorsed by almost every nation in the world - that's why it is the standard. http://www.un.org/millenniumgoals/poverty.shtml
    1. On the line itself. In 1990, the...

  • Oh, and I forgot to say WELCOME to the course. I think it'll be an interesting 4 weeks and i look forward to your active participation. As always, exchange among participants is often the most enriching part of taking a course!

  • BTW, please follow me on Twitter @BaldwinRE! I'm tweeting mostly about Davos things this week.

  • I think the key is to restore the social contract that made people feel that all had a chance to share in both the gains and pains of the changes that globalisation brought. To me, the failing in the advanced nations - especially the US - is a failure of domestic policies to help people adjust to the changes, not the globalisation policy per se.

  • Seriously!

  • Hello from Davos - the temporary HQ of globalisation.
    1) Very big themes are the future of work in the face of AI. General thinking is that the way we educate/train young people has to change, and a tough challenge, as I heard the President of Infosys say this morning is to "re-purpose talent", i.e. retain existing workers to adjust to the new realities...

  • Absolutely! I fear a big backlash in the coming years. Globalisation and AI will hit the service sector in rich nations at the same time, and people in those sectors won't be ready.

  • One thing that is worth keeping in mind is that many confound anti-migration with anti-globalisation. There are really very different things. I think that once you take out the anti-migrant movements in rich nations, they only anti-globalisation nation is the US. And UK a bit with Brexit.

  • Thanks. I take that 10 year old thing as a compliment. I'm trying to change the way people conceptualise globalisation and that requires something that is really simple and really clear. What would bother me is if you said you had heard it all before ...

  • But on the other hand, there are 600 million fewer desperately poor people in the world brought up by the second unbundling.

  • Yes. Globalisation causes pains and gains; it is the duty of national governments to share these

  • You'll like this take on globalisation and income distribution https://www.economist.com/news/finance-and-economics/21707219-charting-globalisations-discontents-shooting-elephant i also cover it in my book.

  • Absolutely. I think we'll have some very informative studies post-Brexit. But as they used to say about communism in the 1980s, they really should have tried it out on animals first ...

  • That's your generations job! But not all cities need to be unsustainable.

  • Hi Stavros
    I don't know enough about Russia to answer that authoritatively! But i'm not sure the light trick is sensitive enough to pick up changes around Moscow, thus they might be yellow but they are so close to the white that we can't see it.