1
Q
Is the post WWII consensus in trouble? (globalisation)
A
- Since 1945 there has been a global consensus on growth leading to improvements in living standards and openness being important to growth. (Wahington consensus)
- A rules based system has formed since 1945 with institutions to support that (wWorld Trade Organization etc.)
- The gains have been substantial, but not evenly shared
2
Q
What suggests the WWII consensus is breaking down? (globalisation)
A
- Current events suggest that consensus may be breaking down (trump raising tariffs)
- Increasingly countries are taking actions that are inward not outward looking
3
Q
Why the shift? (in globalisation)
A
- Globalization does not mean everyone benefits everywhere all the time, some groups will be disadvantaged
- It is hard to compensate the losers
- The benefits of protection are concentrated and the costs are disbursed (benefits of the tariff will be fought for by the very few who get them)
- Voters in the west (higher income countries) may feel workers in poorer countries are stealing their jobs (Brexit)
4
Q
What are the outcomes of trade restrictions? (globalisation)
A
With trade restrictions;
○ Consumers pay more
Other countries may retaliate and the poor are hurt most
