## Book Review: Globalization and Inequality by Elhanan Helpman

## Source details

**Canonical URL:** [Book Review: Globalization and Inequality by Elhanan Helpman](https://www.imf.org/en/publications/fandd/issues/2018/12/book-review-globalization-and-inequality-helpman)

## Other formats

- [Markdown version](/en/publications/fandd/issues/2018/12/book-review-globalization-and-inequality-helpman/index.md)
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## Bibliographic details
- Authors: Federico Rossi
- Published: December 1, 2018

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### Core thesis
- Elhanan Helpman argues that, while globalization may have affected inequality through a variety of channels, "the overwhelming finding of recent research ... is that this impact has been quantitatively small," and we must "look elsewhere for the chief culprit in rising inequality."
- The book traverses "three decades of theoretical and empirical research on international trade" to assess links between globalization and within-country income inequality, with particular attention to the United States.

### Review summary and key findings
- Historical context:
  - Since the "beginning of the 19th century, the volume of global trade has increased dramatically."
  - In recent decades, many firms have globalized their production processes through offshoring and outsourcing.
- Factor proportions (traditional view):
  - The factor proportions theory suggests removal of trade barriers raised prices of goods relying more on highly skilled labor, widening wage gaps between high- and low-skilled workers in rich countries.
  - Empirical evidence reviewed in the book suggests "the magnitude of the effect is rather small" and "other subsidiary implications of the theory are not supported either."
- Alternative mechanisms examined:
  - Helpman reviews research that links globalization and inequality via:
    - The matching process between workers and firms.
    - The survival and growth of different types of firms.
    - Technological change interacting with international trade.
  - These approaches are "extremely rich and diverse" in theoretical sophistication, data, and empirical methodology.
  - Many of these lines of work are "in their infancy," so conclusions remain tentative.
- Overall empirical judgement:
  - The available evidence "does not support the view that globalization is to be blamed for the increase in inequality."

### Contribution and value of the book
- Systematic categorization and discussion of diverse theoretical and empirical studies is highlighted as "perhaps the most valuable contribution of the book."
- The book is described as "highly readable" and written by "one of the most prominent globalization scholars."

### Policy and public debate implications
- The recent policy debate on the labor market consequences of international trade is characterized as "ideological, vague, and ill-informed."
- Role for economists:
  - Economists have an "important mission of disseminating key findings from rigorous research and helping to ground the debate on data and logical reasoning."
  - Helpman's book is presented as "one essential attempt in that direction."

### Publication details (as listed)
- Elhanan Helpman
- Globalization and Inequality
- Harvard University Press, Cambridge, MA, 2018, 232 pp., $26.95

*Source: Book Review: Globalization and Inequality by Elhanan Helpman – IMF Finance & Development Magazine | December 2018*

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## Content in this bundle

- **Grounding the Debate**
  - [Grounding the Debate (Markdown version)](/-/media/files/publications/fandd/article/2018/december/book-review-globalization-and-inequality-helpman.pdf.md){rel="alternate" type="text/markdown"}
  - [Grounding the Debate (PDF)](/-/media/files/publications/fandd/article/2018/december/book-review-globalization-and-inequality-helpman.pdf){rel="external" type="application/pdf"}
- **Fundamentar el debate**
  - [Fundamentar el debate (Markdown version)](/-/media/files/publications/fandd/article/2018/december/es/book2.pdf.md){rel="alternate" type="text/markdown"}
  - [Fundamentar el debate (PDF)](/-/media/files/publications/fandd/article/2018/december/es/book2.pdf){rel="external" type="application/pdf"}
- **Mieux informer le débat**
  - [Mieux informer le débat (Markdown version)](/-/media/files/publications/fandd/article/2018/december/fr/note-de-lecture-globalization-and-inequality-book2.pdf.md){rel="alternate" type="text/markdown"}
  - [Mieux informer le débat (PDF)](/-/media/files/publications/fandd/article/2018/december/fr/note-de-lecture-globalization-and-inequality-book2.pdf){rel="external" type="application/pdf"}
- **book2**
  - [book2 (Markdown version)](/-/media/files/publications/fandd/article/2018/december/ru/book2.pdf.md){rel="alternate" type="text/markdown"}
  - [book2 (PDF)](/-/media/files/publications/fandd/article/2018/december/ru/book2.pdf){rel="external" type="application/pdf"}
- **《全球化与不平等》伊勒哈南·赫尔普曼著 - 书评 - 金融与发展 - 国际货币基金组织季刊**
  - [《全球化与不平等》伊勒哈南·赫尔普曼著 - 书评 - 金融与发展 - 国际货币基金组织季刊 (Markdown version)](/-/media/files/publications/fandd/article/2018/december/zh/book2.pdf.md){rel="alternate" type="text/markdown"}
  - [《全球化与不平等》伊勒哈南·赫尔普曼著 - 书评 - 金融与发展 - 国际货币基金组织季刊 (PDF)](/-/media/files/publications/fandd/article/2018/december/zh/book2.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/fandd/issues/2018/12/book-review-globalization-and-inequality-helpman_