Slobalisation meets Globalization
By Katrin Reil
The war in Ukraine and the resulting fundamental change in the world political situation also pose new challenges for the discussion of global economic relationships. Professor Dr. Gabriel Felbermayr, one of the most renowned European economists, visited ESB Business School to speak on the current situation.
Globalization and worldwide trade in goods were normal economic processes until the end of February. Russia's war of aggression against Ukraine, on the other hand, is now leading to what Professor Felbermayr calls a sudden “slobalization." Professor Felbermayr, president of the Institute for Economic Research (WiFo) in Vienna, accepted Professor Dr. Philipp von Carlowitz’s invitation to give the lecture. The international sanctions have led to an acute deceleration of global trade. Felbermayr went on to say that other political events, such as Brexit, show that this trend has been ongoing for some time.
He set out many reasons for the rejection of globalization and the rise of a "new protectionism.” Globalization is increasingly seen as an elites-driven project that creates inequality Felbermayr said. In addition, trade policy is increasingly seen as an instrument for enforcing non-economic goals, for example in the areas of climate protection and human rights, he said, adding that the role of China as the winner of hyperglobalization is also being viewed more and more critically.
Are trade wars a promising instrument? Professor Felbermayr also gave concise assessments of this question based on a simulation of a possible German-American trade war. Economic sanctions, according to the results of the simulation, are successful, among other things, if the sender is larger than the receiving country. In addition, the sanctions package should be as comprehensive as possible with few substitutes embedded in a broad set of measures. However, the result is a welfare loss on both sides, where the thing is to ensure that the other country loses more.
With a lot of newly acquired knowledge in mind, the students entered into a concluding discussion with Professor Felbermayr. For example, the question was raised as to what additional sanctions could currently be introduced against Russia. Professor Felbermayr openly addressed all questions and created a lively discussion atmosphere.
The audience left the guest lecture with new knowledge and an expert classification of the current global economic and trade policy situation in mind. Despite the newly gained insights into slobalization and trade wars, at the end of the evening everyone essentially wished for one thing - peace.
About Professor Dr. Gabriel Felbermayr:
Prof. Dr. Gabriel Felbermayr is President of the Institute for Economic Research (WiFo) in Vienna and former President of the Kiel Institute for the World Economy (IfW). He is one of the most best-known economists in the European region. He was ranked 6th in the Frankfurter Allgemeine Zeitung’s 2020 ranking of economists. Professor Felbermayr's specialty is global economic interdependencies.