Overview
Political, economic, and technological changes have converged to create a process widely referred to as ‘globalization’. The result is a world economy that is more integrated and interdependent, and the flow of capital, information, knowledge, technology, and people is facilitated to varying degrees. Although globalization had a positive overall effect on the average income of the poorest segment of the population across all regions and income groups, the relative ease with which each of these factors flows in the globalised economy seem to have a different impact on inequality between countries.

Activity description
Go to the website and read the article published in the International Monetary Fund. The document highlights that increasing trade and financial globalization had separate identifiable and opposite effects on income distribution. It found that trade liberalisation and export growth are associated with lower income inequality. At the same time increased financial openness is associated with higher inequality. However, their combined contribution to inequality has been much lower than that of technology, especially in developing countries.

Consider:

• How has globalization evolved?
• What cross-country trends can we observe in inequality?
• How does globalization affect inequality?
• How can international business contribute to inequality?

Visit the following website:
https://link.springer.com/content/pdf/10.1057%2Fimfer.2013.7.pdf