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A Primer on Trade and Inequality

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  • Dani Rodrik

Abstract

In the public imagination globalization’s adverse effects have loomed large, contributing significantly to the backlash against the political mainstream and the rise of far-right populism. The literature on trade and inequality is in fact exceptionally rich, with important theoretical insights as well as extensive empirical findings that sheds light on this recent experience. Some of the key results of this literature, discussed here, are as follows: Redistribution is the flip side of the gains from trade, and it becomes larger relative to net gains from trade in the advanced stages of globalization. Compensation is difficult for both economic and political reasons. International trade often differs from other market exchanges, raising fairness concerns in ways that domestic markets do not. The economic benefits of deep integration are generally ambiguous. Dynamic or growth gains from trade are uncertain.

Suggested Citation

  • Dani Rodrik, 2021. "A Primer on Trade and Inequality," NBER Working Papers 29507, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:29507
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    Cited by:

    1. Pisch, Frank & Berlingieri, Giuseppe, 2022. "Managing Export Complexity: The Role of Service Outsourcing," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 135680, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    2. Xiangxu Meng & Dian Wang, 2024. "Income Distribution Effects of the Belt and Road Initiative," Sustainability, MDPI, vol. 16(13), pages 1-16, June.
    3. Nigai, Sergey, 2023. "Selection effects, inequality, and aggregate gains from trade," Journal of International Economics, Elsevier, vol. 142(C).

    More about this item

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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