The Distribution of Gains from Globalization

By Valentin F. Lang, Marina Mendes Tavares

March 13, 2018

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Format: Chicago

Valentin F. Lang, and Marina Mendes Tavares. The Distribution of Gains from Globalization, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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.

Subject: Economic integration, Globalization, Income distribution, Income inequality, National accounts, Personal income

Keywords: Economic globalization, Effect of globalization, Global, Globalization, Globalization index, Globalization indicator, Globalization process, Globalization score, Globalization scores, Globalization's effect, Growth, Income distribution, Income growth, Income inequality, Income level, Inequality, National income, Personal income, WP

Publication Details

Pages:

66
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/054
Stock No:

WPIEA2018054
ISBN:

9781484347065
ISSN:

1018-5941

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