## Rising Income Inequality: Technology, or Trade and Financial Globalization?

_IMF Working Papers, July 1, 2008_

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## Bibliographic details
- Authors: Chris Papageorgiou, Subir Lall, Florence Jaumotte
- Published: July 1, 2008
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451870435.001

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### Summary findings
- The study examines the relationship between trade and financial globalization and the rise in inequality in most countries in recent decades.
- Technological progress has a greater impact on rising inequality than globalization.
- Globalization has a limited overall impact on inequality because of two offsetting tendencies:
  - Trade globalization is associated with a reduction in inequality.
  - Financial globalization—and foreign direct investment in particular—is associated with an increase in inequality.
- Both globalization and technological changes increase the returns on human capital.
- Emphasis on the importance of education and training in both developed and developing countries to address rising inequality.

### Policy implications and recommendations
- Prioritize education and training policies to enhance human capital returns and mitigate inequality driven by technological progress and globalization.
- Recognize differentiated effects of globalization channels:
  - Support policies that amplify the inequality-reducing aspects of trade globalization.
  - Implement measures to manage the inequality-increasing effects associated with financial globalization and foreign direct investment.

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/rising-income-inequality-technology-or-trade-and-financial-globalization-22170_