Are Trade Shocks to Blame for Our Extremist Politics?
Researchers Hunt for the Missing Link Between Import Imbalances and Populist Anger
Does economic competition from low-wage manufacturing countries like China make politics in Western countries more polarized?
The short answer is yes. The harder, unanswered question is: How, exactly?
A body of research including our own papers shows overwhelming evidence that, over the last 20 years or so, trade integration with low-wage manufacturing countries like China has had dramatic effects on the manufacturing landscape in rich countries like the United States and Germany.
It also appears this growing trade exposure is to blame, at least in part, for growing political polarization and increasing …