On the Dynamics of Globalization

Arribas, Iván and Pérez, Francisco and Tortosa-Ausina, Emili (2008): On the Dynamics of Globalization. Published in: Documentos de Trabajo - Fundación BBVA No. 9 (2008)

Abstract

How has the process of international economic integration advanced over the last four decades? How will the foreseeable future look like? We attempt to answer this sort of questions by considering some methods which have scarcely been used in the literature on globalization. First, we consider a set of indicators which measure not only the degree of openness of economies, but also how connected they are to each other, following Arribas et al. (2007). Second, we assess how these indicators have evolved over time, what the likely steady state distribution might be, and whether results differ depending on a variety of weighting schemes (GDP, population). Results show that, under current trends, the future world will be much more integrated, especially for the most heavily populated countries. However, there is still a long way to go before the Standard of Perfect International Integration can be achieved.

• Item Type: MPRA Paper
• Language: English
• Keywords: International Economic Integration, Globalization, International Trade, Network Analysis, Distribution Dynamics
• Subjects: F - International Economics > F1 - Trade > F15 - Economic Integration; F - International Economics > F0 - General > F02 - International Economic Order and Integration; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification

References

Arribas, I., Pérez, F., and Tortosa-Ausina, E. (2007). Measuring international economic integration: Theory and evidence of globalization. Documentos de trabajo, Fundación BBVA-IVIE, Madrid.

Baldwin, R. and Martin, P. (1999). Two waves of globalisation: superficial similarities, fundamental differences. Working Paper 6904, National Bureau of Economic Research.

Bashtannyk, D. M. and Hyndman, R. J. (2001). Bandwidth selection for kernel conditional density estimation. Computational Statistics & Data Analysis, 36:279–298.

Bhagwati, J. (2004a). Anti-globalization: why? Journal of Policy Modeling, 26:439–463.

Bhagwati, J. (2004b). In Defense of Globalization. Oxford University Press, Oxford.

Bulli, S. (2001). Distribution dynamics and cross-country convergence: a new approach. Scottish Journal of Political Economy, 48:226–243.

Combes, P.-P., Lafourcade, M., and Mayer, T. (2005). The trade-creating effects of business and social networks: evidence from France. Journal of International Economics, 66:1–29.

Crafts, N. (2000). Globalization and growth in the twentieth century. Working Paper 2000/44, IMF, Washington. Durlauf, S. N. and Quah, D. T. (1999). The new empirics of economic growth. In Handbook of Macroeconomics, volume 1A, pages 231–304. North Holland, Amsterdam.

Frankel, J. A. (2000). Globalization of the economy. Working Paper 7858, NBER, Cambridge, Massachusetts.

Frankel, J. A. and Rose, A. K. (2000). Estimating the effects of currency unions on trade and output. Working Paper 7857, NBER, Cambridge, Massachusetts.

Geweke, J., Marshall, R. C., and Zarkin, G. A. (1986). Mobility indices in continuous time Markov chains. Econometrica, 54(6):1407–1423.

Goerlich, F. J. (2003). Weighed, kernel density estimators and convergence. Empirical Economics, 28(2):335–351.

Goldman Sachs (2004). Dreaming with BRICS: The path to 2050. Global Economics 99, Goldman Sachs Group, Inc.

Greaney, T. M. (2003). Reverse importing and asymmetric trade and FDI: a networks explanation. Journal of International Economics, 61:453–465.

Härdle, W. and Linton, O. (1994). Applied nonparametric methods. In Engle, R. and McFadden, D., editors, Handbook of Econometrics, volume 4. North Holland, Amsterdam.

Johnson, P. A. (2000). A nonparametric analysis of income convergence across the US states. Economics Letters, 69:219–223.

Johnson, P. A. (2005). A continuous state space approach to “Convergence by parts”. Economics Letters, 86:317–321.

Kali, R., Méndez, F., and Reyes, J. (2007). Trade structure and economic growth. Journal of International Trade & Economic Development, 16(2):245–269.

Kali, R. and Reyes, J. (2007). The architecture of globalization: a network approach to international economic integration. Journal of International Business Studies, 38:595–620.

Kremer, M., Onatski, A., and Stock, J. (2001). Searching for prosperity. Carnegie-Rochester Conference Series on Public Policy, 55:275–303.

Lamo, A. (2000). On convergence empirics: Some evidence for Spanish regions. Investigaciones Económicas, 24:681–707.

Maddison, A. (2001). The world economy: A millenial perspective. Development Centre Studies, OECD.

Milanovic, B. (2006). Economic integration and income convergence: Not such a strong link? Review of Economics and Statistics, 88(4):659–670.

OECD (2007). Financial Market Trends: Ageing and Pension System Reform, Implications for Financial Markets and Economic Policies, volume 2005. Organization for Economic Cooperation and Development, Paris.

O’Rourke, K. H. and Williamson, J. G. (1999). Globalization and History: The Evolution of a 19th Century Atlantic Economy. MIT Press, Cambridge, Massachusetts.

O’Rourke, K. H. and Williamson, J. G. (2002). When did globalization begin? European Review of Economic History, 6:23–50.

Pandey, M. and Whalley, J. (2004). Social networks and trade liberalization. Working Paper 10769, National Bureau of Economic Research, Cambridge, MA.

Quah, D. T. (1993). Empirical cross-section dynamics in economic growth. European Economic Review, 37:426–434.

Quah, D. T. (1996a). Aggregate and regional disaggregate fluctuations. Empirical Economics, 21:137–159.

Quah, D. T. (1996b). Empirics for economic growth and convergence. European Economic Review, 40:1353–1375.

Quah, D. T. (1996c). Regional convergence clusters across Europe. European Economic Review, 40:951–958.

Quah, D. T. (1996d). Twin Peaks: Growth and convergence in models of distribution dynamics. Economic Journal, 106(437):1045–1055.

Quah, D. T. (1997). Empirics for growth and distribution: Stratification, polarization and convergence clubs. Journal of Economic Growth, 2(1):27–59.

Quah, D. T. (2003). One Third of the World’s Growth and Inequality. In Eicher, T. S. and Turnovsky, S. J., editors, Inequality and Growth. Theory and Policy Implications, chapter 2, pages 27–58. The MIT Press, Cambridge, Massachusetts.

Rauch, J. E. (1999). Networks versus markets in international trade. Journal of International Economics, 48:7–35.

Rauch, J. E. (2001). Business and social networks in international trade. Journal of Economic Literature, 39:1177–1203.

Rauch, J. E. and Casella, A. (2003). Overcoming informational barriers to international resource allocation: prices and ties. The Economic Journal, 113:21–42.

Rauch, J. E. and Trindade, V. (2002). Ethnic Chinese networks in international trade. Review of Economics and Statistics, 84(1):116–130.

Redding, S. (2002). Specialization dynamics. Journal of International Economics, 58(2):299–334.

Reichlin, L. (1999). Discussion of “Convergence as distribution dynamics” (by Danny Quah). In Baldwin, R., Cohen, D., Sapir, A., and Venables, A., editors, Market Integration, Regionalism, and the Global Economy, pages 328–335. Cambridge University Press, Cambridge.

Rodríguez, F. and Rodrik, D. (2001). Trade policy and economic growth: a skeptic’s guide to the cross-national evidence. In Bernanke, B. and Rogoff, K. S., editors, Macroeconomics Annual 2000. MIT Press for NBER, Cambridge, MA.

Rodrik, D. (1998a). Globalisation, social conflict and economic growth. World Economy, 21(2):143–158.

Rodrik, D. (1998b). Symposium on globalization in perspective: An introduction. Journal of Economic Perspectives, 12(4):3–8.

Rodrik, D. (1998c). Who Needs Capital-account Convertibility? Number 207 in Essays in International Finance. Princeton University, Princeton, NJ.

Rodrik, D. (1999). The New Global Economy and Developing Countries: Making Openness Work. Number 24 in Policy Essays. Overseas Development Council, Washington, DC.

Rodrik, D. (2000). How far will international economic integration go? Journal of Economic Perspectives, 14(1):177–186.

Salvatore, D. (2004). Globalization, growth and poverty: editor’s introduction. Journal of Policy Modeling, 26:421–424.

Shorrocks, A. F. (1978). The measurement of mobility. Econometrica, 46(5):1013–1024.

Stiglitz, J. E. (2002). Globalization and Its Discontents. Norton, New York and London.

Stiglitz, J. E. (2006). Making Globalization Work. Norton, New York.

Williamson, J. (1996). Globalization, convergence and history. Journal of Economic History, 56(2):277–306.

Wolf, M. (2005). Why Globalization Works. Yale University Press, New Haven.

World Bank (2007). Global Economic Prospects. World Bank, Washington.