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GTAP Resources: Resource Display

GTAP Resource #6417

"Globalization not localization key to COVID-19 recovery and poverty alleviation"
by Chepeliev, Maksym, Maryla Maliszewska, Israel Osorio Rodarte, Maria Filipa Seara Pereira and Dominique van der Mensbrugghe

The impacts of COVID-19 pandemic and future reshaping of global value chains have been subject to extensive discussion. The study presents various future scenarios of globalized or segmented world and analyzes the implications of various shocks such as future disruption to supply chains, trade policy changes and climate change policy changes. We find that globalization will strengthen a recovery from the COVID-19 pandemic while localization will weaken it. Developing and developed countries are better off in a globalized world. Developing countries stand to gain the most from strengthening GVCs. The overall increase in real income in developing countries between 2019 and 2030 could be 10 percentage points higher in a globalized world. In a globalized world, global trade would grow be expected to grow by 25% over 2019-2030. In a world where countries re-shore their production global trade could instead decline by 2% over 2019-2030 or be 22% lower in 2030. A “hostile” environment for GVCs, with a shift towards global reshoring, could drive an additional 52 million people into extreme poverty. The hardest hit would be the poor in Sub-Saharan Africa with 80% of the new poor caused by reshoring. Developing countries can take steps to increase their resilience to future shocks through unilateral reduction of tariffs on inputs, implementing trade facilitation measures, diversifying sources of inputs.

Resource Details (Export Citation) GTAP Keywords
Category: 2021 Conference Paper
Status: Not published
By/In: Presented during the 24th Annual Conference on Global Economic Analysis (Virtual Conference)
Date: 2021
Created: Maliszewska, M. (4/16/2021)
Updated: Pereira, M. (4/15/2022)
Visits: 2,569
- Dynamic modeling
- Economic analysis of poverty
- Economic development

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