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90 Foreign Aff. 28 (2011)
The Impact of Globalization on Income and Employment: The Downside of Integrating Markets

handle is hein.journals/fora90 and id is 612 raw text is: The Impact of Globalization on Income and Employment The Downside of Integrating Markets Michael Spence GLOBALIZATION IS the process by which markets integrate worldwide. Over the past 6o years, it has accelerated steadily as new technologies and management expertise have reduced transportation and transaction costs and as tariffs and other man-made barriers to international trade have been lowered. The impact has been stunning. More and more developing countries have been experiencing sustained growth rates of7-1o percent; 13 countries, including China, have grown by more than 7 percent per year for 25 years or more. Although this was unclear at the outset, the world now finds itself just past the midpoint in a century-long process in which income levels in developing countries have been converging toward those in developed countries. Now, the emerging economies' impact on the global economy and the advanced economies is rising rapidly. Until about a decade ago, the effects of globalization on the distribu- tion of wealth and jobs were largely benign. On average, advanced economies were growing at a respectable rate of 2.5 percent, and in most of them, the breadth and variety of employment opportunities at various levels of education seemed to be increasing. With external help, even M IC HAEL S PENCE is Distinguished Visiting Fellow at the Council on Foreign Relations and the author of The Next Convergence: The Future of Economic Growth in a Multispeed World. He received the Nobel Prize in Economics in 2001. [28]