An Alternative Globalization Barometer for Investigating the Trend of Globalization

Abstract

Analyzing, evaluating, and predicting the trend of globalization are highly valuable endeavors. However, existing literature lacks a quantifiable metric for objective evaluation. To fill the gap, we first compiled a Globalization Index based on existing globalization indices and using the CRITIC weighting method. Second, we constructed the Globalization Barometer and a trend term for trend analysis using the HP filtering method. Third, we conducted time-series predictions for globalization trajectory by applying the Random Forest model. Our results indicate that: (1) The de facto and de jure globalization both displayed a gradually upward trend over time; (2) the 2008 financial crisis and the 2020 COVID-19 pandemic negatively impacted globalization and served as turning points; (3) on a positive note, COVID-19 has narrowed the gap in both de facto and de jure globalization. This is due to the fact that the shocks were uneven, with economies that participated more in globalization weathering the brunt of the impact, while economies that participated less experiencing little changes; (4) the de facto and de jure globalization are predicted to remain on an upward trend for the subsequent 5 years. This research provides essential references for assessing and predicting globalization trends.