Long Economic Cycles

From: Robin Hanson (hanson@dosh.hum.caltech.edu)
Date: Tue Sep 10 1996 - 13:10:36 MDT


The following paper plausibly argues that global economic history is
repeating a pattern of a century ago. If so, this would imply
increasing global political tensions. Robin
---------------------------------------------------------------
     "Globalization and Inequality Then and Now: The Late 19th
      and Late 20th Centuries Compared"

      BY: JEFFREY G. WILLIAMSON
             Harvard University

           Paper ID: NBER Working Paper 5491
           Date: March 1996

           Contact: Jeffrey G. Williamson
           E-Mail: MAILTO:jwilliam@kuznets.harvard.edu
           Postal: Department of Economics, 216 Littauer Center,
                     Harvard University, Cambridge, MA 02138
           Phone: (617) 495-2438
           Fax: (617) 495-7730
           ERN Ref: HISTORY:WPS96-105

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     The late 19th and the late 20th century shared more than
     simply globalization and convergence. Globalization also
     seems to have had the same impact on income distribution: in
     the late 19th century, inequality rose in rich countries and
     fell in poor countries; according to Adrian Wood, the same
     has been true of the late 20th century. Furthermore, while
     George Borjas and Wood think that globalization accounted for
     something like a third to a half of the rise in inequality in
     America and other OECD countries since the 1970s, the late
     19th century evidence suggests at least the same, perhaps
     more. However, those modern economists who favor a rising
     inequality explanation coming from (unskilled) labor-saving
     technological change will be pleased to hear that it probably
     accounted for more than a third of the rising inequality in
     the New World and for more than a half of the falling
     inequality in Europe. It also appears that the inequality
     trends which globalization produced prior to World War I
     were at least partly responsible for the interwar retreat
     from globalization. Will the world economy of the next
     century also retreat from its commitment to globalization
     because of its inequality side effects?

     JEL Classification: N31, N32, N33, N34, J31, J61



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