Answer to Question #100837 in Economics for globalizatioan and income

Question

explain globalization and income inequality

Answer 1

Globalization is the spread of products, technology, information, and jobs across national borders and cultures. In economic terms, it describes an interdependence of nations around the globe fostered through free trade. On the upside, it can raise the standard of living in poor and less developed countries by providing job opportunity, modernization, and improved access to goods and services. On the downside, it can destroy job opportunities in more developed and high-wage countries as the production of goods moves across borders. It is proven, countries that integrated to world economy succeeded in reducing the income inequality. Nevertheless, inequality rose in labor-scarce countries by opening up to international trade and to international factor movements. On the other hand, the effect of globalization on income inequality within nations has gone in both ways. For instance, Chinese cities that experienced a greater degree of openness in trade also tend to have greater declines in rural-urban income inequality.