18 de December, 2024

Ridge Forum at FEN Analyzes Globalization Retreat with International Scholars and Minister Marcel

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The Ridge Forum, held at the School of Economics and Business (FEN) of the Universidad de Chile from December 16 to 17, brought together international academics, policymakers, and key economic leaders to analyze the retreat of globalization. Organized by the Research Institute for Development, Growth, and Economics (RIDGE), FEN, and the Central Bank of Chile, the event featured academic workshops, policy debates, and networking opportunities for top-tier researchers exploring the frontier of economic knowledge.
The forum revolved around two parallel workshops: "International Macroeconomics" and "Growth and Development in Macroeconomics/International Trade." These sessions included presentations by scholars from leading universities, economists from the IMF, IDB, and World Bank, as well as representatives from regional central banks and the Federal Reserve. Keynote speeches were delivered by Laura Alfaro of Harvard Business School, presenting her work "Hedging and Risk," and Elhanan Helpman of Harvard University, presenting "Oligopolists, Trade, and Innovation." The forum also included contributions from prominent economists and academics representing institutions such as the Pontifical Catholic University of Chile, Universidad Adolfo Ibáñez, Universidad de los Andes, and the Central Bank of Chile.

Highlight: A Panel on Globalization
The centerpiece of the forum was the discussion panel "Globalization in Retreat? Opportunities and Challenges for Developing Countries," featuring Professors Alfaro and Helpman, alongside Chile’s Minister of Finance, Mario Marcel. Moderated by FEN Dean José De Gregorio, the panel explored the critical issues facing Chile and the broader region amid mounting global trade tensions. Against the backdrop of Donald Trump's recent reelection and shifts in international trade dynamics, the discussion provided essential insights into how developing nations like Chile can navigate this changing landscape.

Eugenia Andreasen, a FEN academic and one of the event's organizers, emphasized the forum's value: "This event has been an invaluable opportunity to bring together international and local experts to discuss current and future economic challenges facing our region. The quality of presentations and the depth of discussions reflect the academic community's commitment to sustainable economic development."

Globalization Challenges: Perspectives from Experts
During the panel, FEN Dean José De Gregorio remarked, "Globalization is in retreat. While trade has grown slightly less than global GDP in recent years, it is expected to keep pace with GDP in the future. This conversation began before the global financial crisis, but back then, trade was strong—making today's discussion even more crucial."

Elhanan Helpman noted that although trade declined during the pandemic, it recovered quickly. "Studies show that public opinion is strongly in favor of trade if compensatory payments are in place. The argument that international trade is responsible for inequality between countries is perplexing. Factors such as education levels and public policies also play a significant role," he explained. Referring to his book Globalization and Inequality, Helpman highlighted that trade wars in the current global context could prove dangerous.

Laura Alfaro urged caution when discussing globalization's retreat, acknowledging that much of the decline in trade is linked to China. "Let’s be careful before announcing the end of globalization. What we are witnessing—well-documented by many researchers—is the redistribution of the U.S. market," she stated.

Minister Mario Marcel emphasized Chile's economic reliance on China, noting it as the country's top trading partner but only its sixth-largest investor. "Canada leads in investment, followed by the U.S., likely due to Chile’s distinct institutional environment compared to other countries. Recently, China’s largest investments in Chile have come through acquisitions of existing firms," Marcel observed. Reflecting on the potential impact of Trump’s second term, he added, "Looking ahead, in light of a possible second Trump administration and the rhetoric of deglobalization, we must identify strategies to navigate these times. During Trump’s first term, Chilean exports outperformed global trade, staying in the black."

This critical analysis at the Ridge Forum underscored the pressing need for thoughtful strategies as Chile and other developing nations face the complexities of a shifting global economic order.