Globalization in cities2/19/2024 spending on goods rose while spending on services declined (according to data going all the way back to 1929). Until 2020, there had never been a year when U.S. In contrast, consumer spending on services (many of which require in-person contact and are less tradable than goods) was down 2% over the last two years. purchases of physical goods grew so quickly was during the recovery from World War II. In the U.S., real personal consumption of physical goods rose 17% from 2019 to 2021. The main reason trade roared back so decisively, despite disruptions to global supply chains, was a surge in demand for traded goods. Trade FlowsĪfter plummeting at the onset of the pandemic, world trade in goods bounced back to above pre-pandemic levels before the end of 2020, and was setting new records by early 2021. We look here at the latest trends across those four categories of flows - and consider early signals of how the war might alter their trajectories moving forward. The DHL Global Connectedness Index, which our team develops at the NYU Stern Center for the Future of Management, measures globalization based on international flows of trade, capital, information, and people. To understand why - and to help you think through consequences for your company - it’s essential to start with a baseline of how global flows were trending before the war. In our view, the war will likely reduce many types of international business activity and cause some shifts in their geography, but it will not lead to a collapse of international flows. However, global cross-border flows have rebounded strongly since the early part of the pandemic. Russia’s invasion of Ukraine has led to a new round of predictions that the end of globalization is nigh, much like we saw at the beginning of the Covid-19 pandemic.
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