Deglobalizaion and Social Safety Nets in Post-Covid-19 Era: Textbook Macroeconomic Analysis

50 Pages Posted: 26 May 2020

See all articles by Assaf Razin

Assaf Razin

Tel Aviv University - Eitan Berglas School of Economics

Efraim Sadka

Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Alexander Horst Schwemmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics

Date Written: May 2020

Abstract

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.

Suggested Citation

Razin, Assaf and Sadka, Efraim and Schwemmer, Alexander Horst, Deglobalizaion and Social Safety Nets in Post-Covid-19 Era: Textbook Macroeconomic Analysis (May 2020). NBER Working Paper No. w27239, Available at SSRN: https://ssrn.com/abstract=3609692

Assaf Razin (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel

Efraim Sadka

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972 3 640 9712 (Phone)
+972 3 642 8074 (Fax)

National Bureau of Economic Research (NBER)

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CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Alexander Horst Schwemmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

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