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The distribution of gains from globalization


Lang, Valentin F; Mendes Tavares, Marina (2018). The distribution of gains from globalization. IMF Working Paper 54, International Monetary Fund.

Abstract

We study economic globalization as a multidimensional process and investigate its effect on incomes. In a panel of 147 countries during 1970-2014, we apply a new instrumental variable, exploiting globalization’s geographically diffusive character, and find differential gains from globalization both across and within countries: Income gains are substantial for countries at early and medium stages of the globalization process, but the marginal returns diminish as globalization rises, eventually becoming insignificant. Within countries, these gains are concentrated at the top of national income distributions, resulting in rising inequality. We find that domestic policies can mitigate the adverse distributional effects of globalization.

Abstract

We study economic globalization as a multidimensional process and investigate its effect on incomes. In a panel of 147 countries during 1970-2014, we apply a new instrumental variable, exploiting globalization’s geographically diffusive character, and find differential gains from globalization both across and within countries: Income gains are substantial for countries at early and medium stages of the globalization process, but the marginal returns diminish as globalization rises, eventually becoming insignificant. Within countries, these gains are concentrated at the top of national income distributions, resulting in rising inequality. We find that domestic policies can mitigate the adverse distributional effects of globalization.

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Additional indexing

Item Type:Working Paper
Communities & Collections:06 Faculty of Arts > Institute of Political Science
Dewey Decimal Classification:320 Political science
JEL Classification:F62, F63, I24, O15; O47
Uncontrolled Keywords:globalization, growth, inequality
Language:English
Date:13 March 2018
Deposited On:16 Jan 2019 13:24
Last Modified:27 Nov 2020 07:30
Series Name:IMF Working Paper
Number of Pages:65
OA Status:Closed
Free access at:Official URL. An embargo period may apply.
Official URL:https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwimuvGAsfLfAhWEjosKHYq9B1QQFjAAegQICRAC&url=https%3A%2F%2Fwww.imf.org%2F~%2Fmedia%2FFiles%2FPublications%2FWP%2F2018%2Fwp1854.ashx&usg=AOvVaw2J6KSUXv7VfNrmWziKoLot
Related URLs:https://www.imf.org/en/Publications/WP/Issues/2018/03/13/The-Distribution-of-Gains-from-Globalization-45722 (Organisation)

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