SMA hosted a speaker session with Dr. Paul Krugman (Distinguished Professor of Economics, Graduate Center of the City University of New York; Columnist, New York Times) as part of its SMA INSS/PRISM Speaker Series.
The economic trend of globalization and the rapid development of global logistics which developed during last four decades will likely slow or even digress. Dr. Krugman commented that hyper globalization of the world economy peaked during the mid-2000s. While many people attributed the global economic crisis with slowing economic globalization, inward looking policy changes in developing countries had the largest impact. These inward looking policy changes, economic nationalism, and national security related economic factors are likely to keep another surge of economic globalization from occurring, even after the current global pandemic is over. If the global economy shrinks, the United States’ and China’s economies will be able to survive because of their massive production industries; however, developing economies that rely on exporting raw or natural material will likely suffer.
Dr. Krugman commented that the global service industries had been predicted to increase as a result of the globalization of economics. This predicted trend never occurred. However, a new trend of individuals working from home because of the COVID-19 pandemic has occurred. While this has not immediately impacted the globalization or de-globalization of economic activity, the inability to create person-to-person relationships will likely impact future economic deals. Dr. Krugman emphasized that policy changes to protect national security interests, like protecting supplies of rare earth minerals and smaller developing economies is important for the USG going forward. Also, China’s emergence as a global economic leader coupled with its authoritarian regime could change the future landscape of economic geopolitics.
Note: We are aware that many government IT providers have blocked access to YouTube from government machines during the pandemic in response to bandwidth limitations. We recommend viewing the recording on YouTube from a non-government computer or listening to the audio file (below), if you are in this position.