Two Views on the Cause of the Global Crisis
While analysts can quibble over the contributing factors to the financial meltdown, a deeper, more fundamental problem was the real cause: income inequality.
While analysts can quibble over the contributing factors to the financial meltdown, a deeper, more fundamental problem was the real cause: income inequality.
Although no one can yet predict the full implications of the financial crisis, it may have a silver lining for the U.S. if it is able to maintain its position of power while learning valuable lessons in humility. In the future, the U.S. may be more cautious about taking on massive debt, less reckless with its military spending, and more willing to cooperate on global problems.
When new estimates of purchasing power parity were released last December, economic understanding of the world suddenly shifted: incomes in many emerging economies are significantly lower than previously thought. Branko Milanovic explains how this revelation will greatly affect our comprehension of poverty, global inequality, and the speed of economic growth.
It's become a cliché that globalization has brought both pain and gain. But in the general painting of the dark side of globalization, one aspect is frequently ignored: intensified trade and travel have enabled the rise of corrupt states that thrive on illegal businesses. Only by changing the rules of the global trade that allowed corrupt states to grow can this blot on globalization be removed.
Two fears drive the West's unease with globalization: The first is a fear of job loss due to competition from low-wage countries. The second is the fear of ethnic and cultural dilution due to increased immigration.
In an upcoming paper in World Economics, “Global Income Inequality: What It Is and Why It Matters?” Branko Milanovic outlines the meaning of global inequality - inequality between the world’s citizens. Milanovic explores the limits of our ability to measure global inequality, and the thorny challenges of assessing whether inequality has changed over the years, whether globalization has impacted the gap between the global rich and poor, and how extreme world inequality might ever be changed through global governance.
Despite the promises made by globalization, in the last twenty years the world's poorest countries have fallen further behind the rich. In a new Carnegie Paper, Branko Milanovic debunks current development theories that explain why poorer countries have not reaped the rewards of global economic integration.
The most direct way to break the grip of inefficient, self-serving interests on state power is through the election of new political players not beholden to the same interest groups that supported their predecessors. This is true regardless of political bent and is demonstrated by recent history in postcommunist Eastern Europe.