Globalization, Poverty, and All That:
Factor Endowment versus Productivity Views
William Easterly1
New York University
Abstract: Neoclassical growth models of trade and factor flows based on differences in factor endowments give clear predictions as to how globalization affects inequality. Models in which productivity differences between countries drive trade and factor flows gave more ambiguous predictions. Unfortunately, productivity differences seem necessary to understand many, though not all, globalization and inequality episodes. The factor endowment predictions help give us insight into how the North Atlantic economy achieved decreasing inequality between countries in the last five decades. They also give us insight into the Great Migration of Europeans from the land-scarce Old World to the land-abundant New World in the late 19th and early 20th century, accompanied by the predicted movements in land rental/wage ratios. The factor endowment view of an earlier movement of......

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Title: Globalization, Poverty, And All That:Factor Endowment Versus Productivity Views
Approximate Word Count: 14474
Approximate Pages: 58 (250 words per double-spaced page)

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