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Rising Income Inequality: Technology, or Trade and Financial Globalization?
Author:
Mr. Chris Papageorgiou
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Mr. Subir Lall
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Ms. Florence Jaumotte null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2008: Issue 185
Language:
English
Publication Date:
01 Jul 2008
DOI:
https://doi.org/10.5089/9781451870435.001
ISBN:
9781451870435
ISSN:
1018-5941
Pages:
36
Keywords:
WP; income; Gini coefficient
Legal-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.
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We examine the relationship between trade and financial globalization and the rise in inequality in most countries in recent decades. We find technological progress as having a greater impact than globalization on inequality. The limited overall impact of globalization reflects two offsetting tendencies: whereas trade globalization is associated with a reduction in inequality, financial globalization-and foreign direct investment in particular-is associated with an increase. A key finding is that both globalization and technological changes increase the returns on human capital, underscoring the importance of education and training in both developed and developing countries in addressing rising inequality.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund