Does fast Growth in India and China harm U.S. Workers? Insights from Simulation Evidence
A major political and policy issue today is whether globalisation and rapid economic growth in India and China would have an adverse affect on labour markets in the U.S. and other advanced countries. Some leading economists have argued that even though the recent integration of India and China with the liberalised global economy has not so far had a serious negative impact on wages and employment in advanced countries, it is most likely to do so in the future in view of the growing technological and scientific capabilities in the two developing countries. This is also because it is suggested that this integration represents a sudden doubling of the world labour force without a concomitant increase in capital. The present paper argues against this plausible thesis, essentially on two grounds: (a) it does not take into account the demand side effects of fast growth in India and China; and (b) it abstracts from the dynamism of the U.S. real economy and its innovative large corporations. However, simulations of different scenarios on the CAM world econometric model indicate that at a disaggregated level there are severe supply side constraints on energy, raw materials and food which thwart the expansionary demand side effects of fast growth in India and China.
|Date of creation:||Dec 2008|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.cbr.cam.ac.uk/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard B. Freeman, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 15-32, Summer.
- Singh, Ajit, 2003.
"Special and Differential Treatment, The Multilateral Trading System and Economic Development in the 21st Century,"
24653, University Library of Munich, Germany.
- Singh, Ajit, 2003. "Special and Differential Treatment, The Multilateral Trading System and Economic Development in the 21st Century," MPRA Paper 24301, University Library of Munich, Germany.
- Singh, Ajit, 2007.
"Globalisation, industrial revolutions in India and China and labour markets in advanced countries : implications for national and international economic policy,"
ILO Working Papers
397934, International Labour Organization.
- Singh, Ajit, 2007. "Globalisation, industrial revolutions in India and China and labour markets in advanced countries: implications for national and international economic policy," MPRA Paper 53369, University Library of Munich, Germany.
- Singh, Ajit, 1977. "UK Industry and the World Economy: A Case of De-industrialisation?," Cambridge Journal of Economics, Oxford University Press, vol. 1(2), pages 113-36, June.
- Martin Neil Baily & Robert Z. Lawrence, 2004. "What Happened to the Great U.S. Job Machine? The Role of Trade and Electronic Offshoring," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(2), pages 211-284.
- Ajit Singh & Sukti Dasgupta, 2005. "Will services be the new engine of economic growth in India?," ESRC Centre for Business Research - Working Papers wp310, ESRC Centre for Business Research.
- (No last name available), Himanshu, 2013. "Poverty and Food Security in India," ADB Economics Working Paper Series 369, Asian Development Bank.
When requesting a correction, please mention this item's handle: RePEc:cbr:cbrwps:wp378. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Howard Cobb)
If references are entirely missing, you can add them using this form.