Academic journal article Contemporary Economic Policy

Globalization: Contents and Discontents

Academic journal article Contemporary Economic Policy

Globalization: Contents and Discontents

Article excerpt

I. INTRODUCTION

This article is based upon presentations at the closing session of the 13th International Conference of the Western Economic Association International (WEAI), hosted by the Instituto de Economia, Universidad Catolica de Chile, Santiago, January 3-6, 2017. The panelists are Nobel Laureates Daniel L. McFadden and Robert F. Engle, and Professors Orley Ashenfelter and Klaus Schmidt-Hebbel. Daniel L. McFadden holds the E. Morris Cox Chair at the University of California, Berkeley, and is Presidential Professor of Health Economics at the University of Southern California. He received the Nobel Prize in Economic Sciences in 2000 for developing economic theory and econometrics for discrete choice analysis. Among many honors, he holds the John Bates Clark Medal from the American Economic Association (AEA). He has served as President of the Econometric Society and the AEA, and is currently President-Elect of the WEAI. Robert F. Engle is the Michael Armellino Professor of Finance at New York University (NYU) Stern School of Business, and was awarded the 2003 Nobel Prize in Economic Sciences for his research on the concept of autoregressive conditional heteroskedasticity (ARCH). He is the Director and Founder of the NYU Stern Volatility Institute and is the Co-Founding President of the Society for Financial Econometrics. Among many awards and invitations as Keynote Speaker, he has given Keynote Addresses at the 10th, 11th, and 13th WEAI International Conferences in Tokyo, Wellington, and Santiago. Orley Ashenfelter is the Joseph Douglas Green 1895 Professor of Economics at Princeton. He is a recipient of the IZA Prize in Labor Economics, the Mincer Award for Lifetime Achievement of the Society of Labor Economists, and the Karel Englis Medal awarded by the Academy of Sciences of the Czech Republic. Among the acknowledgements of his many contributions, he has served as president of the American Economic Association, the American Law and Economic Association, the Society of Labor Economists, the American Association of Wine Economists, and is currently President of WEAL Klaus Schmidt-Hebbel is Professor of Economics, Pontificia Universidad Catolica de Chile. Previously he served as Chief Economist of the Organization for Economic Cooperation and Development (OECD), Division Chief of Economic Research at the Central Bank of Chile, and Principal Economist at the World Bank.

II. DANIEL L. MCFADDEN

As moderator of this panel, I will first summarize the features that most people associate with globalization, and then pose the question of who is discontented with what features, and why.

At its core, globalization means free trade: open borders for raw materials, processed and finished goods, services, capital, and labor (immigration). Concomitants of free trade are international coordination on intellectual property protection, working conditions, product standards, technological innovation and diffusion, and fiscal, monetary and growth policies. One notable aspect of globalization is the rise of multinational corporations and financial institutions that elude management by national authorities. These aspects of globalization are clearly economic. However, there are other features, usually perceived as more broadly humanistic or moral, that nationalists conflate with free trade and use as arguments against free movement of goods, services, capital, and labor. These include international cooperation on protection of the environment and health, human rights and religious tolerance, law and conflict resolution, governance, and preservation of history and culture. There are also overarching issues of economic policy--the benefits of diversification and exploitation of comparative advantage versus the systemic risks of interdependence, and economic and moral arguments for assistance to less developed countries (LDCs) that promote economic convergence and equality in living standards.

The case for free trade is part of the foundation of classical economic reasoning. …

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