Income Inequality Research Paper

The world economy is now more integrated than ever. With increasing cross-border flow of goods, capital, people, technology and information countries have become increasingly interconnected and interdependent. Continuous technological advancements have made transportation and communication much cheaper and faster than in the past, transforming the way we share information, trade and travel. Multilateral trade agreements like GATT, formation of WTO and adoption of liberalization policies by many countries in the post war period, especially since 1980s, have reduced the trade and financial barriers and accelerated the global economic integration in the last few decades.
On one hand, this recent wave of globalization has expanded the market …show more content…
In the short and medium term, the increase in within country inequality is said to have a positive effect in an country’s economic growth (Forbes, 2000). Nevertheless, high income inequality makes it difficult for the majority of the population to have access to higher education, skill trainings, healthcare, etc. and, consequently, affects their job prospects and earnings. In a long term, it further widens the gap between rich and poor, leads to more crime, corruption and political instability which adversely affects the economic growth of a country and the wellbeing of its …show more content…
There are many theories which explain how different aspects of globalization may affect income distribution and inequality within a country. Several empirical researches have also made attempts to examine the relationship between globalization and income inequality (examples). However, the empirical result on the causal relationship between globalization and income inequality is ambiguous because: (i) there is no precise theory about globalization and income inequality, and (ii) the researchers define and measure globalization in various ways as globalization is such a broad and multidimensional concept. Income inequality is narrower topic compared to globalization, but there is still no consistency in its measurement because of difference in definition and sources of

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