Policy needs to be comprehensive and governments must be pressured to promote cooperation. Jonathan Michie explains.
In 1997 Dani Rodrik asked: “Has globalisation gone too far?” arguing that globalisation was triggering domestic, social and political pressures. But globalisation was cheered on by politicians, academics and practitioners alike. Then in 2007-2008 the process proved unsustainable; risk-sharing arrangements that were sold (quite literally) as designed to avoid a crash, crashed; and politicians who had pronounced government intervention a thing of the past, and nationalisation no longer practicable, intervened and nationalised their banks to save the private sector from itself.
Ten years after the start of the global financial crisis of 2007-2008, for many countries, output, employment and wage levels are barely higher than when the crisis struck. For the OECD countries, employment reached its post-crisis trough in the first quarter of 2010, with 58.6% of the population (aged 15-74) employed – 2.2 percentage points lower than in 2007, corresponding to 20.3 million jobs; by the end of 2015 employment was still 5.6 million lower than previously.