North-South Globalization and Inequality

Joel Hellier ()

No 273, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: To analyse the globalization-inequality relationship, we extend the North-South HOS model by assuming (i) that the size of the South (emerging countries) increases over time and that the North (advanced countries) and the South never stand simultaneously inside the diversification cone, (ii) several northern and southern countries with different skill endowments, and (iii) North-South technological differences, productivity catching up and technological transfers. The model generates three phases of globalization, corresponding to different production patterns and to specific changes in inequality in the North and in the South. In the North, inequality continuously increases and unskilled workers purchasing power continuously decreases during the first phase of globalization, and inequality diverges across countries. In the South, very different profiles in terms of inequality dynamics are possible, depending on the country’s skill endowment and on the its technological gap with the North. Unlike the traditional North-South HOS approach, the model predictions are consistent with observed facts.

Keywords: globalization; inequality; North-South trade; technology. (search for similar items in EconPapers)
JEL-codes: D33 D63 F16 J31 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2012-10
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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