Feb 2 (W): 6. Globalization and inequality, from the lens of the factors model, sectors model, and firm-level trade theory. Predictions, evidence, and policy implications. Other influences on inequality. What drives the backlash against globalization? Writeup # 1 due Fri Feb 4 8:00p.

Branko Milanovic, “The Inequality Paradox: Rising Inequalities Nationally, Diminishing Inequality Worldwide,” Pro-Market [blog] (Dec 10, 2018), Milanovic.pdf
Zeeshan Aleem, “‘Another Kick in the Teeth’: A Top Economist on How Trade with China Helped Elect Trump,” Vox [blog] (Mar 29, 2017), Aleem.pdf
Optional: Jason Kuo and Megumi Naoi, “Individual Attitudes,” Oxford Handbook of the Political Economy of International Trade, ed. Lisa L. Martin (May 2015), 1-24, Kuo Naoi.pdf

Slides: Session 6 ~ Firms and Inequality.pptx, Session 6 ~ Firms and Inequality.pdf

Class Recording: Session 6 Class Recording (Feb 2)

Discussion Thread: Discussion Thread for Sessions 5-6

Objectives

To analyze the implications of the factors model, sectors model, and firm-level theory about economic inequality
To evaluate these implications using evidence on patterns of inequality
To analyze alternative explanations of inequality and of the backlash against globalization

Key Concepts

the "China shock"
college wage premium
economic inequality, income inequality, wealth inequality
skill-biased technological change
"routine tasks"

Discussion Questions

Is globalization responsible for increasing inequality, and if so, through what mechanism?
What explains the populist backlash against globalization? Why is globalization not more popular, if it allegedly improves individual consumers' purchasing power and real income?