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Thursday, March 17, 2011

Jobs and Structure in the Global Economy

Michael Spence and Sandile Hlatshwayo:

Jobs and Structure in the Global Economy, by Michael Spence and Sandile Hlatshwayo, Project Syndicate: The global economy is at a crossroads as the major emerging markets (and developing countries more broadly) become systemically important...
Consider, for example, what has occurred over the past 20 years in the United States. Some parts of the tradable sector (finance, insurance, and computer systems design) grew in value added and employment, while others (electronics and cars) grew in value added but declined in employment, as lower value-added jobs moved offshore. The net effect was negligible employment growth in the tradable sector. ...
But ... while many goods and services are less expensive than they would be if the country were walled off from the global economy, we cannot assume that these cost savings necessarily compensate for diminished employment opportunities. People might trade away cheaper goods for assurances that a wide range of productive and rewarding employment options would be available, now and in the future. ...
If a relatively open global system is to survive..., it will have to be managed ... to ensure that its benefits are distributed equitably between and within countries. ...
It is not a good idea to assume that markets will solve these distributional problems by themselves... All countries, advanced and emerging, have to address issues of inclusiveness, distribution, and equity as part of the core of their growth and development strategies. ...

    Posted by on Thursday, March 17, 2011 at 01:35 AM in Economics, Income Distribution, International Trade | Permalink  Comments (23)

          


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