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Programme Overview

Barriers to international trade and foreign direct investment have been falling since WWII with an increasing number of countries signing in trade agreements under the supervision of the World Trade Organization. In more recent years the fall of the Iron Curtain together with the liberalisation of China and India has more than doubled the labour force that serves global markets. In turn, the world labour force has become increasingly footloose. The world now counts around 260 million international migrants, representing 3.4 per cent of global population, an increased of almost 50 per cent since the beginning of the century.

At the same time, information technologies and automation have exposed goods and services that were not previously traded to the forces of international competition through the unfolding of global value chains. While these changes may have boosted efficiency and aggregate welfare, they have also increased competition in occupations and tasks that were previously insulated from developments elsewhere in the world. These processes of globalisation and technological change therefore present a mix of opportunities and challenges with the latter gaining salience in the last few years as exemplified by Brexit and globally rising protectionist pressure.

Nations must continually adapt to find their most advantageous niche, a task embedded within increasingly important international frameworks, while also making adaptation as inclusive as possible. Countries as a whole tend to gain from international trade, but groups within those countries can lose. The identity of these winners and losers changes as new tasks, resources and technology are integrated with world markets. Existing asymmetries of ownership, skills and privileges present in all societies also shape future policies, as groups form to channelize globalisation forces toward their own interests. While globalisation can stir up antagonism both within and across countries, it can also provide new options and opportunities to firms and workers. Research of the Trade Programme helps identify and analyze these complex processes.

The programme highlights these and other issues through a series of tightly focused research projects, involving both inter-disciplinary and international collaboration encompassing economists, geographers and historians.

Internationally, the programme has extensive institutional links with other European and North American academics. Recent work carried out by CEP trade researchers has been published in numerous prestigious academic journals, including the American Economic Review, Econometrica, Economic Journal, Journal of Political Economy, Quarterly Journal of Economics, Review of Economic Studies, Journal of International Economics and Review of Economics and Statistics.

The programme concentrates on five main areas of research:

  • The Effects of Globalisation on Firms: This area considers the varied responses of firms to reduced trading costs and the rapidly changing economic environment

  • The Impacts of Globalisation on Workers: This area considers the consequences of globalisation for inequality, unemployment, and changes in living standards

  • Trade Policy: This area examines why governments make the policy choices they do, and studies the specific cross country impacts of these policies

  • New Economic Geography:This area considers the spatial dimension of globalisation in such issues as the clustering of economic activity and the geographical segregation of winners and losers.
  • Brexit uses the analytical approach of the above projects to consider the impacts of Brexit on UK and EU growth, trade, immigration, labour markets, inequality, regulation and foreign investment.