## The Distribution of Gains from Globalization

_IMF Working Papers, March 13, 2018_

## Source details

**Canonical URL:** [The Distribution of Gains from Globalization](https://www.imf.org/en/publications/wp/issues/2018/03/13/the-distribution-of-gains-from-globalization-45722)

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## Bibliographic details
- Authors: Valentin F. Lang, Marina Mendes Tavares
- Published: March 13, 2018
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484347065.001

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### Summary and main findings
- Study examines economic globalization as a multidimensional process and investigates its effect on incomes.
- In a panel of 147 countries during 1970-2014, the authors apply a new instrumental variable exploiting globalization’s geographically diffusive character.
- Income gains from globalization:
  - Substantial for countries at early and medium stages of the globalization process.
  - Marginal returns diminish as globalization rises, eventually becoming insignificant.
- Within countries, gains from globalization are concentrated at the top of national income distributions, resulting in rising inequality.
- Domestic policies can mitigate the adverse distributional effects of globalization.

### Methodology
- Dataset: panel of 147 countries during 1970-2014.
- Identification strategy: new instrumental variable exploiting globalization’s geographically diffusive character.
- Conceptualization: economic globalization treated as a multidimensional process (globalization index / globalization indicator referenced).

### Distributional outcomes (within and across countries)
- Across countries:
  - Early- and medium-stage globalization associated with substantial income gains.
  - High levels of globalization associated with diminishing and eventually insignificant marginal returns.
- Within countries:
  - Gains concentrated at the top of national income distributions.
  - Resulting effect: rising income inequality.

### Policy implications and recommendations
- Domestic policies can mitigate the adverse distributional effects of globalization.
- Focus implied on policy measures that address within-country concentration of gains to reduce rising inequality (policy details are discussed in the working paper).

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## Content in this bundle

- **The Distribution of Gains from Globalization, WP/18/54, March 2018**
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_Source: https://www.imf.org/en/publications/wp/issues/2018/03/13/the-distribution-of-gains-from-globalization-45722_