The Relationship between Globalization, Economic Growth and Income Inequality
AbstractThis study investigates the relationship between globalization and income inequality by developing a new globalization index based on economic growth. In addition two other indices of globalization, non-parametric Kearney and parametric principal component analysis are used as benchmarks to compare the results. The proposed new index is decomposed into four sub components. The index is also estimated in several forms separated by different economic growth variables and in decomposed or composite forms. The main feature of this approach is that the estimation of globalization index and the examination of its relationship with economic development are conducted in one step. All indices are compared in respect of their level, development and correlations. The empirical analysis is based on a panel data consisting of 61 developed and developing countries observed during the period 1995-2001. Regression analysis is used to estimate the effects of globalization on income inequality. To examine the sensitivity of the relationship between globalization and inequality, different inequality variables are employed. It is expected that the indices serve as useful tools in comparing the globalization process among countries and the evaluation of the the globalization effect on economic development and income inequality. This study is useful in the construction of a new multidimensional index of globalization with different and estimated weights attached to the determinant factors.
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Bibliographic InfoPaper provided by Seoul National University; Technology Management, Economics, and Policy Program (TEMEP) in its series TEMEP Discussion Papers with number 201051.
Length: 39 pages
Date of creation: Jan 2010
Date of revision: Jan 2010
Globalization; income inequality; economic growth; index;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- F20 - International Economics - - International Factor Movements and International Business - - - General
- F59 - International Economics - - International Relations and International Political Economy - - - Other
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-13 (All new papers)
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