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It’s a Big World After All

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  • Steven Brakman
  • Charles van Marrewijk

Abstract

Thomas Friedman’s book the world is flat has been a bestseller since it appeared in 2005. The remarkable success of the book reflects to a certain extent the present fears with respect to increasing globalization. Using many examples, Friedman argues that distance (however defined) is no longer a dominant characteristic of the world economy, or will cease to be so in the very near future. Competition is thought to be a race to the bottom, with the lowest-wage countries as the big winners. We disagree, and with us many other economists (see, for example, Leamer, 2006). Distance dominates all aspects of international trade and many stylized facts of international trade can only be understood by pointing towards the importance of distance. Furthermore, there is little evidence of income convergence. Using various methods and data sets, we show that many threats of global competition for the position of the traditionally developed (OECD) countries are unwarranted.

Suggested Citation

  • Steven Brakman & Charles van Marrewijk, 2007. "It’s a Big World After All," CESifo Working Paper Series 1964, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_1964
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp1964.pdf
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    References listed on IDEAS

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    1. Branko Milanovic, 2006. "Global Income Inequality," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 7(1), pages 131-157, January.
    2. Edward E. Leamer, 2007. "A Flat World, a Level Playing Field, a Small World After All, or None of the Above? A Review of Thomas L Friedman's The World is Flat," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 83-126, March.
    3. Robert C. Feenstra, 1998. "Integration of Trade and Disintegration of Production in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 31-50, Fall.
    4. M. G. Quibria, 2005. "Measuring Global Poverty Right," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 6(4), pages 111-121, October.
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    Cited by:

    1. Amegashie, J. Atsu & Ouattara, Bazoumanna & Strobl, Eric, 2007. "Moral Hazard and the Composition of Transfers: Theory with an Application to Foreign Aid," MPRA Paper 3158, University Library of Munich, Germany, revised 06 May 2007.

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    Keywords

    income levels; convergence; trade; distance; leapfrogging;

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