RIETI Report August 2020

Globalisation and the COVID-19 pandemic: A spatial economics perspective

The authors present an analysis of the early phases of the COVID-19 epidemic from a spatial economics perspective, focusing on the role of globalization in shaping the epidemic and its future potential impacts. Fujita and Hamaguchi begins with a comparison of the US parallelogram in the north-eastern United States and the European Blue Banana which accounted for a large portion of the global infections in mid-May, looking at causal and environmental factors for these patterns. The focus then shifts to the future and the impacts of COVID-19 and the increased use of ICT, in addition to the competition for hegemony between the US and China to see how they might impact globalization.

This month's featured article

Globalisation and the COVID-19 pandemic: A spatial economics perspective

FUJITA MasahisaProfessor, Konan University; Adjunct Professor, Institute of Economic Research, Kyoto University; Former President and Chief Research Officer, Research Institute of Economy, Trade and Industry

HAMAGUCHI NobuakiFaculty Fellow, RIETI

Unlike previous infectious diseases, which tended to be connected to poor environments, the epicentres of the COVID-19 pandemic have been the wealthiest metropolises of industrialised countries. This column argues that the population concentration in large cities has provoked an even more intensive agglomeration of social and economic activities in high-interaction environments, driving urban development but also fostering conditions for the spread of COVID-19. Globalisation further promoted concentration, migration, and inequality, which might hamper the restructuring of the post-pandemic global economy if effective international coordination and a multi-core international regime that values diversity and competition in creative endeavours continue to be threatened.

Contrary to many other infectious diseases, the novel COVID-19 virus does not have a direct connection to poor environments. Rather, the epicentres of the most severe outbreaks until mid-May 2020 were the wealthiest metropolises of industrialised countries.

To read the full text
https://www.rieti.go.jp/en/columns/v01_0148.html

Recent articles on RIETI's website

"Regulating cross-border data flows: Firm-level analysis from Japan"
by TOMIURA Eiichi (Faculty Fellow, RIETI) / ITO Banri (Research Associate, RIETI) / Byeongwoo KANG (Associate Professor, Institute of Innovation Research, Hitotsubashi University)
https://www.rieti.go.jp/en/columns/v01_0147.html

"The Pressing Need for Introduction of a Monetary Solution for Employee Dismissal: Argument for Japanese Employment Reform"
by KAWAGUCHI Daiji (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/papers/contribution/kawaguchi/09.html

"Transfer pricing regulation and tax competition"
by Jay Pil CHOI (University Distinguished Professor in Economics, Michigan State University) / FURUSAWA Taiji (Professor, Graduate School of Economics, University of Tokyo) / ISHIKAWA Jota (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/columns/v01_0144.html

"COVID-19 Crisis and Employment Adjustment"
by ADACHI Daisuke (Yale University) / KAWAGUCHI Daiji (Faculty Fellow, RIETI) / SAITO Yukiko (Senior Fellow (Specially Appointed), RIETI)
https://www.rieti.go.jp/en/columns/a01_0597.html

"Global politics from the view of the political-economy trilemma"
by Joshua AIZENMAN (Dockson Chair in Economics and International Relations, USC, and Research Associate, NBER) / ITO Hiroyuki (Visiting Fellow, RIETI)
https://www.rieti.go.jp/en/columns/v01_0146.html

"Structural changes in industries and the reduction of inequality: The world after coronavirus"
by KOBAYASHI Keiichiro (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/papers/contribution/kobayashi/73.html

"Twenty-First Century Industrial Policy Emphasizing Framework Design and Encouraging Competition"
by OKAZAKI Tetsuji (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/papers/contribution/okazaki/08.html

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