Daily Management Review

NBER: Plight of poor due to the pandemic may hinder globalization


The poor bore the brunt of the costs during the COVID-19 pandemic, creating the ground for isolationism and a curtailment of globalization in the world, says the American National Bureau of Economic Research.

Guillaume Speurt
Guillaume Speurt
The COVID-19 pandemic could lead to a rise in isolationist sentiment in countries around the world, and the rise of isolationists to power could lead to a winding down of globalization, says Pol AntrĂ s, Professor of Economics at Harvard University and author of the National Bureau of Economic Research (NBER) report.

According to Antras, the economy has suffered unevenly as a result of the pandemic and the poorest people have suffered the most. From a political point of view, this can contribute to the rise of isolationists to power. 

"If the income gap creates the ground for isolationism, the slowdown in globalization could turn into a curtailment," Antras warned in his report.

The study concludes that the main challenge for future globalization is "institutional and political in nature, not technological". 

He estimates that the pandemic has triggered political reactions against globalization, and that new technologies may exacerbate the inequalities that worsened during the pandemic. In addition, the Harvard professor noted, the pandemic crisis will increase political tensions between countries, especially between the US and China. 

According to Antras, the recovery in trade growth indicates that the downturn caused by the pandemic will not be long-term. 

"The COVID-19 pandemic and travel restrictions have become an obstacle to migration, but it is still difficult to talk about the long-term consequences of this shock," the expert says in the report. The professor believes that there are no economic or technological prerequisites for deglobalisation, but there are political prerequisites.

source: nber.org