Is Globalization Sustainable

Globalization creates both positive externalities and negative effects that undermine economic growth and decrease total factor productivity and economic agents’ motivation. Despite the rapid advance of digital technologies, aggregate productivity growth has slowed over the past decade or so, raising the question of how digital technologies can boost productivity. Costs and benefits are not evaluable making the real effect unclear. Nowadays, globalization seems to be necessary for the economic system, but unsustainable because of the increasing social discontent. In this context, no magic bullet is likely to exist. A crucial need is the recovery of an institutional framework where governments at all levels, are nevertheless again endowed with the function and the power to pursue wellbeing, innovation and growth through proactive economic policies.