The Guru of Globalization: Assaf Razin of Tel Aviv University
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- Authors: PRAKASH LOUNGANI
- Published: March 1, 2021
Biography and career milestones
- Born in the Kibbutz Shamir on the slopes of the Golan Heights; drafted into the Israeli army and in 1958, at age 17, suffered a near-fatal injury from friendly fire that led to a year-long hospitalization.
- Won a fellowship to pursue graduate studies at the University of Chicago; early influences included Milton Friedman and Robert Mundell.
- First academic position at the University of Minnesota; later long-term affiliation with Tel Aviv University and teaching in the graduate program at Cornell University (retired in 2016).
- Awarded the EMET Prize in 2017 for “excellence in academic and professional achievements that have far-reaching influence and make a significant contribution to society.”
- Briefly appointed to a top position in Israel’s Treasury in 1979; served six months before being ousted after publicly warning about inflationary policy.
Research contributions and themes
- Early and sustained focus on the “promise and perils of globalization”—an integrated view of international trade, capital flows, and labor mobility.
- Pioneered work that crossed subfields of economics, integrating micro and macro perspectives to trace channels of an increasingly interconnected world.
- Key analytic themes:
- How capital mobility affects patterns of international trade and specialization.
- Risk sharing through capital mobility enabling greater specialization but increasing vulnerability to global disruptions.
- Policy “spillovers”: how monetary and fiscal choices in one country can constrain other countries in an integrated world.
- Interaction between capital mobility and domestic tax/welfare systems, including the “race to the bottom” in tax competition.
- Interaction between labor mobility and welfare systems, and the political economy implications (e.g., populist claims of “welfare shopping”).
Major works and findings (selection)
- 1978 book with Elhanan Helpman, A Theory of International Trade under Uncertainty:
- Demonstrated that greater risk sharing via capital mobility enables greater specialization in trade, raising productivity.
- Highlighted increased vulnerability from specialization when global disruptions occur.
- 1987 book Fiscal Policies and the World Economy (with Jacob Frenkel):
- Emphasized the need for fiscal policy coordination in a world with capital mobility; showed how national fiscal choices produce international spillovers.
- 1990s research with Gian Maria Milesi-Ferretti and Lars Svensson:
- Studied current account deficits and conditions for sudden reversals; investigated microfoundations linking terms-of-trade changes to the current account under capital mobility.
- Challenged simple vulnerability rules (e.g., current account deficits exceeding 5–6 percent of a country’s income) in a world with active foreign capital flows.
- Work with Efraim Sadka:
- Explored how capital and labor mobility interact with tax and welfare systems; warned that attempts to attract foreign capital via tax cuts can deplete revenues and constrain public services.
Policy engagement and impact
- Regular engagement with policy institutions, including repeated visits to the IMF in the 1990s after the 1994 Mexican “tequila crisis.”
- Research informed debates on:
- Early warning indicators for current account reversals (noting the difficulty of precise timing, as in the 1997–98 Asian crises).
- The need for fiscal coordination in integrated capital markets—relevant to ongoing EU debates on fiscal rules and economic unification.
- The distributional consequences of globalization and the political economy of migration and welfare.
Israel-focused analysis and contemporary assessments
- Longstanding engagement with Israel’s economy; authored Israel and the World Economy (2018):
- Argued Israel successfully guided large foreign capital flows toward growth industries, notably high-tech start-ups.
- Highlighted absorption of a million immigrants—“about 20 percent of its population”—from the former Soviet Union in the 1990s as a factor aiding its high-tech sector and overall growth.
- Noted the “frankness on the potential pitfalls” of globalization, including growing inequality—citing Israel’s level of inequality as “the highest in the developed world.”
Personal life, honors, and legacy
- Endured personal tragedy with the death of his son Ofair in 1996 at age 30 after progressive multiple sclerosis; Ofair completed his PhD at Georgetown University before his death.
- Established a prize for the best research paper by a Georgetown economics graduate student and an annual lecture series in Ofair’s memory; speakers have included Stanley Fischer, Cecilia Rouse, Jeff Sachs, Dani Rodrik, and Paul Krugman.
- 60th birthday celebration in 2001 drew leading international economists including Paul Krugman and Anne Krueger.
- Describes his professional approach as discovering and sticking to his “comparative advantage” and credits “the good fortune to be surrounded by great people.”
- Public persona characterized by resilience and modesty; quipped at his 60th celebration about his parents’ hypothetical reactions to praise.
Current work and outlook
- “Razin turns 80 this year” and marked the occasion with a new book on how globalization can be restored after setbacks from populism and the pandemic.
- Continues to write and comment on Israeli economic and political developments; remains preoccupied with prospects for peace in the region and with optimism about the possibility of a better world, citing his grandson’s poem: “The kingdom of Utopia is hidden hope amongst a heartless world.”
IMF F&D Magazine profile by Prakash Loungani, March 2021.
Content in this bundle
- رائد العولمة
- 经济学人物 - 全球化领域的权威 - 金融与发展 - 国际货币基金组织季刊 -2021年3月号·第58卷
- The Guru of Globalization: Assaf Razin of Tel Aviv University – IMF F&D
- El gurú de la globalización ● Finanzas y Desarrollo ● Marzo de 2021
- Profile of Economist Assaf Razin Telaviv University Fr
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