NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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DEglobalizaion and Social Safety Nets in Post-Covid-19 Era: Textbook Macroeconomic Analysis

Assaf Razin, Efraim Sadka, Alexander Horst Schwemmer

NBER Working Paper No. 27239
Issued in May 2020
NBER Program(s):International Finance and Macroeconomics

Globalization is expected to be reversed, at least partially, in the post pandemic era. The Great Financial Recession of 2008–10 marked a historic turning point in the direction of weakening the degree of global economic integration. Now, in the post-pandemic era, policymakers appear poised to take deliberate steps to reinforce the movement toward de-globalization. At the same time, safety nets are expected to be strengthened. In this paper, we develop a model, with which we analyze central macroeconomic interactions between globalization and safety nets. We put together stylized elements of trade globalization, financial globalization, international tax competition, immigration, and welfare state, all in a two-skill, two-period stylized model, where policy (taxes and social benefits) is determined through majority voting.

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Document Object Identifier (DOI): 10.3386/w27239

 
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