Income Inequality Under Economic Globalisation

Abstract

This paper examines the evolution of income inequality over the past half a century and considers whether economic globalisation has been responsible for the rising degree of income inequality. It is argued that the minimisation of the degree of income inequality cannot and should not be the sole objective of the economic policy makers and that the maximisation of social welfare is a much more important objective. It is possible for the degree of income inequality to increase at the same time that everyone is better off. While economic globalisation may sometimes worsen the degree of income inequality, it has enabled hundreds of millions of people around the world to be lifted up from poverty. Moreover, there are many remedial measures that can be used by economic policy makers to alleviate the negative effects of economic globalisation on the degree of income inequality.