market integration, income inequality

market integration

identifies phenomena where markets of goods and services with related goods experience similar patterns of change

- can be deliberately done by the government to control the direction of the economy

- can occur due to shifts in supply and demand which have a spillover effect on other markets

- can be positive when patterns indicate economic prosperity

- can be used to identify negative trends which can give a chance to reverse it before it worsens

income inequality and globalization

Technological change + globalization = leads to more inequality

• lower price of capital goods (machinery and equipment), leads to replacement of routine labor

• reduced prices thanks to existence of cheap labor such as in china

populism (income inequality)

polarization, rich vs poor

will winner take-all rule remain?

• scalable jobs - same unit of labor which can be sold over and over again

  • people who are highly successful in their scalable jobs earn much more than those who arent successful (increased inequality)

  • technological revolution continues to expand number of jobs that are scalable