Ajit Singh and Rahul Dhumale
- Published in print:
- 2004
- Published Online:
- August 2004
- ISBN:
- 9780199271412
- eISBN:
- 9780191601255
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199271410.003.0006
- Subject:
- Economics and Finance, Development, Growth, and Environmental
Provides a critical analysis of some widely accepted explanations for the significant changes in income distribution that have occurred in many advanced countries during the last two decades. Much of ...
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Provides a critical analysis of some widely accepted explanations for the significant changes in income distribution that have occurred in many advanced countries during the last two decades. Much of the vast literature on the subject emphasizes the role of globalization and technology as the primary influence(s) on income distribution in industrial economies during this period, and this study assesses the validity of these propositions and provides an alternative analytical and policy perspective; it also considers whether these globalization and/or technology theses can be applied to developing countries. The study starts with an introduction, and then the second section outlines the main stylized facts about inequality of income distribution and other unfavourable labour market tendencies (high unemployment and deindustrialization) that have come to characterize industrial economies during the 1980s and 1990s; it also reviews the relevant characteristics of North–South trade in manufactured products. The third section outlines the nature of the ‘Transatlantic Consensus’ that has emerged in this area, notwithstanding serious methodological differences between trade and labour economists; this consensus gives a unified explanation for increased income inequality in the US and of high unemployment in Europe within the same conceptual framework. The fourth section provides a critique of the Consensus and suggests an alternative perspective on income inequality, unemployment, and deindustrialization in advanced countries; the fifth and sixth assess the extent to which changes in income inequality in developing countries can be attributed to globalization, technology, and financial liberalization; and the last section sums up the discussion and outlines policy conclusions, which are substantially different than those that follow from the Transatlantic Consensus.Less
Provides a critical analysis of some widely accepted explanations for the significant changes in income distribution that have occurred in many advanced countries during the last two decades. Much of the vast literature on the subject emphasizes the role of globalization and technology as the primary influence(s) on income distribution in industrial economies during this period, and this study assesses the validity of these propositions and provides an alternative analytical and policy perspective; it also considers whether these globalization and/or technology theses can be applied to developing countries. The study starts with an introduction, and then the second section outlines the main stylized facts about inequality of income distribution and other unfavourable labour market tendencies (high unemployment and deindustrialization) that have come to characterize industrial economies during the 1980s and 1990s; it also reviews the relevant characteristics of North–South trade in manufactured products. The third section outlines the nature of the ‘Transatlantic Consensus’ that has emerged in this area, notwithstanding serious methodological differences between trade and labour economists; this consensus gives a unified explanation for increased income inequality in the US and of high unemployment in Europe within the same conceptual framework. The fourth section provides a critique of the Consensus and suggests an alternative perspective on income inequality, unemployment, and deindustrialization in advanced countries; the fifth and sixth assess the extent to which changes in income inequality in developing countries can be attributed to globalization, technology, and financial liberalization; and the last section sums up the discussion and outlines policy conclusions, which are substantially different than those that follow from the Transatlantic Consensus.
Pranab Bardhan and Christopher Udry
- Published in print:
- 1999
- Published Online:
- November 2003
- ISBN:
- 9780198773719
- eISBN:
- 9780191595929
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198773714.003.0014
- Subject:
- Economics and Finance, Development, Growth, and Environmental
Starts with an illustration of the effect of growth on the terms of trade between a rich and a poor country, using a simple comparative‐static framework. Next, we study the pro‐competitive effects of ...
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Starts with an illustration of the effect of growth on the terms of trade between a rich and a poor country, using a simple comparative‐static framework. Next, we study the pro‐competitive effects of trade liberalization in inputs with a model in which an import‐substituting upstream industry supplies an intermediate good to the producers of the final good. With imperfect competition and scale economies among upstream firms, the model has multiple equilibria, and trade liberalization may trigger an expansion to the higher output equilibrium. The next section is about the effects of trade on economic development as analyzed in endogenous growth theory, with its focus on learning‐by‐doing, dynamic learning spillovers, and trade‐induced technological patterns in growth. This section includes a model of North–South trade that endogenizes comparative advantage and the direction of technological specialization.Less
Starts with an illustration of the effect of growth on the terms of trade between a rich and a poor country, using a simple comparative‐static framework. Next, we study the pro‐competitive effects of trade liberalization in inputs with a model in which an import‐substituting upstream industry supplies an intermediate good to the producers of the final good. With imperfect competition and scale economies among upstream firms, the model has multiple equilibria, and trade liberalization may trigger an expansion to the higher output equilibrium. The next section is about the effects of trade on economic development as analyzed in endogenous growth theory, with its focus on learning‐by‐doing, dynamic learning spillovers, and trade‐induced technological patterns in growth. This section includes a model of North–South trade that endogenizes comparative advantage and the direction of technological specialization.
Giovanni Andrea Cornia (ed.)
- Published in print:
- 2004
- Published Online:
- August 2004
- ISBN:
- 9780199271412
- eISBN:
- 9780191601255
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199271410.001.0001
- Subject:
- Economics and Finance, Development, Growth, and Environmental
Based on an extensive review of relevant literature and an econometric analysis of inequality indexes, this book provides the first systematic analysis of the changes in within‐country income ...
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Based on an extensive review of relevant literature and an econometric analysis of inequality indexes, this book provides the first systematic analysis of the changes in within‐country income inequality over the last 20 years. Within‐country income inequality has risen since the early 1980s in most of the OECD, in all transitional countries, and in many developing countries; more recently, inequality has also risen in India and nations affected by the Asian crisis. Altogether, over the last 20 years, inequality worsened in 70% of the 73 countries analysed in the book, with the Gini index rising by more than five points in half of them. Mainstream theory focussing on rises in wage differentials by skill caused by North–South trade, migration, or on technological change, poorly explains the recent rise in income inequality. Likewise, while the traditional causes of income polarization—landownership inequality (high land concentration), unequal access to education, the urban bias (rural–urban inequality), the ‘curse of natural resources’—still account for much of the cross‐country variation in income inequality, they too cannot explain its recent rise. The book suggests that the recent rise in income inequality was caused to a considerable extent by a policy‐driven worsening in factorial income distribution, wage spread, and spatial inequality; in this regard, it discusses the distributive impact of reforms in trade and financial liberalization, taxation, public expenditure, safety nets, and labour markets. The volume represents one of the first attempts to analyse systematically the relation between policy changes inspired by liberalization and globalization and income inequality. It suggests that capital account liberalization appears to have had on average the strongest disequalizing effect, followed by domestic financial liberalization, labour market deregulation, and tax reform. Trade liberalization had unclear effects, while public expenditure reform often had positive effects. The book is arranged in four parts: I, Income Distribution Trends, Theories and Policies (2 chapters); II, Traditional Causes of Inequality: Still Relevant for Explaining its Rise in the 1980s–90s? (3 chapters); III, Recent Factors Influencing the Distribution of Income (6 chapters); and IV. Country Case Studies (5 chapters on India, Venezuela, Turkey, South Africa, and Thailand).Less
Based on an extensive review of relevant literature and an econometric analysis of inequality indexes, this book provides the first systematic analysis of the changes in within‐country income inequality over the last 20 years. Within‐country income inequality has risen since the early 1980s in most of the OECD, in all transitional countries, and in many developing countries; more recently, inequality has also risen in India and nations affected by the Asian crisis. Altogether, over the last 20 years, inequality worsened in 70% of the 73 countries analysed in the book, with the Gini index rising by more than five points in half of them. Mainstream theory focussing on rises in wage differentials by skill caused by North–South trade, migration, or on technological change, poorly explains the recent rise in income inequality. Likewise, while the traditional causes of income polarization—landownership inequality (high land concentration), unequal access to education, the urban bias (rural–urban inequality), the ‘curse of natural resources’—still account for much of the cross‐country variation in income inequality, they too cannot explain its recent rise. The book suggests that the recent rise in income inequality was caused to a considerable extent by a policy‐driven worsening in factorial income distribution, wage spread, and spatial inequality; in this regard, it discusses the distributive impact of reforms in trade and financial liberalization, taxation, public expenditure, safety nets, and labour markets. The volume represents one of the first attempts to analyse systematically the relation between policy changes inspired by liberalization and globalization and income inequality. It suggests that capital account liberalization appears to have had on average the strongest disequalizing effect, followed by domestic financial liberalization, labour market deregulation, and tax reform. Trade liberalization had unclear effects, while public expenditure reform often had positive effects. The book is arranged in four parts: I, Income Distribution Trends, Theories and Policies (2 chapters); II, Traditional Causes of Inequality: Still Relevant for Explaining its Rise in the 1980s–90s? (3 chapters); III, Recent Factors Influencing the Distribution of Income (6 chapters); and IV. Country Case Studies (5 chapters on India, Venezuela, Turkey, South Africa, and Thailand).