That’s not to say that protectionism and insularity are a great deal of help here – especially since technical progress has much the same impact on lower-skilled workers in closed markets as well. The right course of action is to enable citizens to participate in the rewards of globalisation.
First, research finds that the recovery from a services-led recession tends to be slower than from a durable goods-led recession, as services create less pent-up demand than consumer goods.1 For example, people are unlikely to take twice as many holidays abroad next year to compensate for their lack of foreign travel this year.