Quotes from Richard Baldwin

From 1990, the trend flipped; a century's worth of rich nations' rise has been reversed in just two decades. Their share is now back to where it was in 1914. This trend, which might be called the "Great Convergence," is surely the dominant economic fact of the last two or three decades. It is the origin of much of the anti-globalization sentiment in rich nations, and much of the new assertiveness of "emerging markets.

The upward spiral was checked from the mid-1980s and reversed around 1990. For the last couple of decades, the G7 share has been torqueing downward at a mighty pace. Today it is back to the level that it first attained at the very beginning of the nineteen century.

Any country with a large public debt, and with no access to monetary financing, could be subject to a run on its debt, even if it was solvent in the long run. In other words, a liquidity crisis triggered by lack of confidence could push into insolvency not only banks, but also sovereigns with high public debts and no access to the printing press.

But the rapid industrializers did not industrialize as the G7 nations had done. They did not build up domestic know-how and put together domestic supply chains to become competitive. The I6 became competitive abroad by joining regional production networks.3

Or to use the unbundling theme, globalization's third unbundling is likely to allow labor services to be physically unbundled from laborers.

To put it sharply, reducing the cost of moving goods while the cost of moving ideas remained high was the root cause of the "Great Divergence.

the chapter explains the three-cascading-constraints perspective by walking through, in sequence, the situation where all three constraints were binding (before 1820), the situation where only two were binding (up to 1990), and finally, today's situation where only one is binding.

By relaxing the constraints that had underpinned the vast imbalances in the global distribution of knowledge, the ICT revolution unleashed a historic transformation that might be called the Great Convergence.

Since we are messaging with far more people than we used to when messaging meant airmail or phone calls, we have an incentive to meet more people.

The second unbundling changed technology boundaries. Technology became less defined by national borders and more defined by the contours of international production networks. The resulting gush of know-how from the North to the South has begun to re-equilibrate the knowledge imbalances that had been created during the Great Divergence. The result, as argued in the text, was rapid industrialization and growth take-offs in a handful of developing nations.

Given the high cost of moving ideas, the resulting spatial dispersion of production dampened innovation—both on the demand side and supply side.