Die Unsicherheit verändert alles: Die Zukunft der Globalisierung

ABSTRACT

The COVID-pandemic is an unprecedented uncertainty shock. The increased uncertainty made global supply chains more vulnerable and costly. At the same the financing costs of a robot relative to hourly wages declined substantially when central banks reduced interest rates to fight the crisis. The pandemic is expected to lead to de-globalization with supply chains declining by 35 percent. I then discuss whether governments should intervene to help firms navigate the crisis.