A rational backlash against globalisation

The vote for Brexit and the election of protectionist Donald Trump to the US presidency - two momentous markers of the ongoing pushback against globalisation - led some to question the rationality of voters. Lubos Pastor and Pietro Veronesi (University of Chicago Booth School of Business) present a framework that demonstrates how the populist backlash against globalisation is actually a rational voter response when the economy is strong and inequality is high. It highlights the fragility of globalisation in a democratic society that values equality.