COVID-19 and the threat to globalization: An optimistic note

We analyze the impact of COVID-19 on the world economic system through the three lenses of globalization, discussing economic, social and political aspects, respectively. The pandemic and the policy responses have hit these aspects to different degrees.
Economically, the multilateral system has been under pressure; the quick recovery of world merchandise trade stands out, but FDI remains subdued.

Socially, the reduction in tourism is the largest shock but here a sharp recovery is possible.

Politically, the end of US membership of the WHO and the difficulty of global economic coordination in the G20 are key drivers. The election of a new US President allows for a quick reversal.

The outlook for openness of the world economy is still very much better than in the 1930s. Yes, deglobalization exists. Yes, overall globalization will probably be lower for the foreseeable future. Our societies will, however, remain much more open than at the start of the globalization wave in 1990, connected via the internet with an intensity never seen before in history.