On the Dynamics of Globalization

How has the process of international economic integration advanced over the last four decades? How will the foreseeable future look like? We attempt to answer this sort of questions by considering some methods which have scarcely been used in the literature on globalization. First, we consider a set of indicators which measure not only the degree of openness of economies, but also how connected they are to each other, following Arribas et al. (2007). Second, we assess how these indicators have evolved over time, what the likely steady state distribution might be, and whether results differ depending on a variety of weighting schemes (GDP, population). Results show that, under current trends, the future world will be much more integrated, especially for the most heavily populated countries. However, there is still a long way to go before the Standard of Perfect International Integration can be achieved.