Chart of the Week: Distribution of Globalization’s Gains published by IMF (2018).
“While globalization is generally good for economic growth, the benefits are subject to diminishing marginal returns, according to a recent study of 147 countries from 1970 to 2014. The study looks at how globalization affects the distribution of incomes across and within countries.
The IMF Working Paper The Distribution of Gains from Globalization, by Marina Mendes Tavares and Valentin F. Lang, reveals that in rich economies, globalization still represents a source of economic growth, but the expected gains are lower than in poor and emerging market economies, where globalization increases economic well-being and reduces poverty.
Our Chart of the Week shows that globalization’s effects on a country’s growth depend crucially on how much a nation is already integrated into the global economy. Most low-income and emerging market nations are still far from the levels of integration that advanced economies have already reached. The less wired a country is into the global economy, the greater the positive impact of increasing globalization…”
