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globalization

Jason Furman speaks on inclusive growth in the US

Vamsee Kanchi's picture

Jason Furman, appointed by President Barack Obama as the Chairman of the Council of Economic Affairs, spoke yesterday at the World Bank about inclusive growth in the US. Furman said that average income for the bottom 90% grew strongly across all OECD countries starting in the 1950s, but has flattened in the US since the ‘70s. Furthermore, Furman added that capital income contributes more to overall inequality towards the upper end of the American income distribution.

Furman also pointed out that starting in 2000, labor share in US income started falling, largely because of globalization.

Weekly Wire: The Global Forum

Roxanne Bauer's picture
These are some of the views and reports relevant to our readers that caught our attention this week.
 

Please Do Not Teach This Woman to Fish
Foreign Policy
Is there anyone out there who doesn't think small business is the lifeblood of any economy? From Washington to Warsaw, politicians and pundits just can't speak highly enough of plucky entrepreneurs. Even in poor countries, entrepreneurship is one of the most important forces underpinning economic growth, but the best way to raise living standards and reduce poverty is not necessarily to make everyone an entrepreneur. So why do so many costly development programs apparently ignore this fact? Once upon a time, people who wanted to fight poverty believed in direct approaches that solved identifiable problems one by one. If you wanted to make farmers more productive, you gave them fertilizer. If you wanted to boost manufacturing, you set up factories. To help both of these sectors grow and export goods, you built roads and ports. These kinds of investments quelled hunger and raised incomes in many countries. But recently, an indirect approach arose with promises of still greater benefits.

Where Next for Aid? The Post-2015 Opportunity
ODI/UNDP
This joint ODI-UNDP paper looks at whether development aid will remain important in the post-2015 era, and asks how the old aid model should change in response to a dramatically new world and new sustainable development challenges. The paper suggests that the label “international public finance for sustainable development” – or IPF4SD – is a more accurate description of the types of interventions that need to be funded in the post-2015 era. This finance will also be needed over the long-term. The authors suggest ways in which these funds could reliably be raised over the long-term, as well as how the architecture which mediates IPF4SD could be improved.

Quote of the Week: Margaret Hodge

Sina Odugbemi's picture
“Migration is a feature of globalisation. You can’t stop it; so every time a political party says it is going to be tough on immigration, it fails to deliver and loses trust.”

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Margaret Hodge, a British Labour politician, who has represented Barking, a district in East London, since 1994. On 9 June 2010, she was elected Chair of the Public Accounts Committee, which is responsible for overseeing government expenditures to ensure they are effective and honest.

A Secure Life for Young People, at Home or Abroad

Michael Boampong's picture
Last fall, I had the honor of speaking to participants at the 13th Melaka International Youth Dialogue, which focused on youth migration. I spoke about general trends of youth migration and the increasing number of young people who move within and across countries and regions, a situation that is influencing the human development of young people either positively or negatively.

Of globalization’s promises and perils

Swati Mishra's picture

As a student in 2003, I had an opportunity to interview a social activist about food security in India. Among other things, she blamed globalization for the slow demise of the local food industry. She went a step further and labeled globalization as depriving people (small scale farmers and workers) of their livelihoods. Her solution for India to become a leader in the food industry was by staying local, small, and forming cooperatives rather than fostering large agribusiness. This was quite a contrasting view at a time when India was starting to see benefits from its economic liberalization. In retrospect, I was interviewing someone who was ahead of a trend where activists were increasingly wary about the downsides of globalization and its impact on development.

Since then, globalization has sped up and contentious debates over who ultimately benefits have grown. And just as finance ministers from various countries were converging on Washington to discuss vital issues like extreme poverty, global macroeconomic prospects, jobs creation, and inclusive growth, revisiting globalization seemed germane to tackling development challenges.

Trade: The World Is Not Flat Yet

Otaviano Canuto's picture

Thomas Friedman’s bestseller The World Is Flat highlights the strong forces pushing the world towards a single economic platform. The technology-fueled globalization in the provision of services, and the widespread organization of production processes as global value chains are part of his narrative.

The Real Winners and Losers of Globalization

Branko Milanovic's picture

It is generally thought that two groups are the big winners of the past two decades of globalization: the very rich, and the middle classes of emerging market economies.

The statistical evidence for this has been cobbled together from a number of disparate sources. The evidence includes high GDP growth in emerging market economies, strong income gains recorded for those at the top of the income pyramid in the United States and other advanced economies, as well as what seems to be the emergence of “a global middle class” and casual observations of the rising affluence of Chinese and Indians.

Financial Globalization in Emerging Countries: Diversification vs. Offshoring

Sergio Schmukler's picture

Starting in the early 1990s many emerging economies have embraced financial sector reforms and liberalization. As a consequence, they have become more financial globalized, triggering an important debate about the pros and cons of this process and its relation to financial crises. Notwithstanding all the attention, there are different dimensions of globalization, which are many times not clearly defined and which might add noise to the discussion.

In a recent World Bank policy research working paper and VoxEU column, we argue that there are at least two interconnected, albeit essentially distinct facets of financial globalization. The first one is financial diversification, that is, the cross-country holdings of foreign assets and liabilities. The second one is financial offshoring, that is, the use of foreign jurisdictions to conduct financial transactions. While the former focuses on who holds the assets, the latter deals with where the assets are transacted.

Globalization and the Gender Earnings Gap in the Apparel Industry

Gladys Lopez-Acevedo's picture

The 2012 World Development Report, Gender Equality and Development, argues that gender equality “contributes to economic efficiency and the achievement of other key development outcomes.”  U.S. Secretary of State Hillary Clinton stated at the APEC Women and the Economy Summit that “the increase in employment of women in developed countries during the past decade has added more to global growth than China has, ” and argued that incorporating women into the formal workforce is critical for economic progress.  Understanding how major policy changes affect women’s employment and the gender wage gap is therefore critical for implementing future policies that may affect women’s status and opportunities.


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