The price of American economic nostalgia

Adam S. Posen discussed his Foreign Affairs article, “The Price of Nostalgia: America’s Self-Defeating Economic Retreat.” The new conventional wisdom that the United States has recklessly pursued international economic openness at the expense of workers, causing populism, is incorrect—successive US administrations have increasingly attempted to insulate the American economy from foreign competition. The result has been popular frustration while privileging workers in declining manufacturing industries and neglecting most low-income Americans. Meanwhile, the rest of the world has generally continued to open and globalize. The United States should improve standards for all its workers by reopening its economy, as American governments previously urged other economies needing reform to do.

Robert Z. Lawrence presented his new research on the demand side of manufacturing decline, from a PIIE book to be published later in 2021. Penny Goldberg contextualized the US retreat from globalization through her analysis of “slowbalization” and changing global trade. Simeon Djankov, who leads the Institute’s new project tracking US deglobalization, moderated.

ABOUT THE SPEAKERS

Djankov, PIIE senior fellow, served as deputy prime minister and minister of finance of Bulgaria from 2009 to 2013, and in a variety of senior roles at the World Bank, including as senior director for development economics, where he led a number of cross-national studies, among them the creation of the Bank’s Doing Business Index.

Goldberg, PIIE nonresident senior fellow, is the Elihu Professor of Economics at Yale University. She was chief economist of the World Bank Group between November 2018 and March 2020. Goldberg is currently the president of the Econometric Society and was editor-in-chief of the American Economic Review during 2011–17. 

Lawrence, PIIE nonresident senior fellow, is the Albert L. Williams Professor of Trade and Investment at the John F. Kennedy School of Government at Harvard University. He was appointed by President Bill Clinton to serve as a member of his Council of Economic Advisers in 1999. He is the coauthor of Rising Tide: Is Growth in Emerging Economies Good for the United States? among other works.

Posen is president of the Peterson Institute for International Economics.