Pop Quiz For 14

Front 1

refers to the economies of Taiwan, Singapore, Hong Kong, and South Korea.

Back 1

East Asian Tigers

Front 2

The China Price is the absurdly low rate at which a good or service can be provided by the Middle Kingdom. A company—say, Wal-Mart—can approach a longtime supplier with the China Price and demand that it meet it. Or else.

Back 2

The China Price

Front 3

is an abandoned lead recycling plant that sits 135 meters from a residential neighborhood in Tijuana.

Back 3

Metales y Derivados

Front 4

Significant downward bias of estimate because the poor
person in India, who spends most income on food, can buy
with Rs. 60 a little more than one-half of the food
purchasable with $1 in the United States

Back 4

Hypothetical Example in India

Front 5

Using per capita GDP incomes at market exchange rates,
between-country world income distribution has become
rapidly more unequal

Back 5

Inequality

Front 6

Need to use PPP measurement on a population-weighted
basis: between-country world income inequality has
indeed...

Back 6

been falling since around 1980

Front 7

Problems with PPP Measurement.
1) Market exchange rate as “real” as PPP in
measuring economic and geopolitical relations between countries

2) Exclude China and India, then even inequality measured by PPP is widening

*These exclusions are significant, but they reveal that decreasing inequality has NOT been a generalized phenomenon in countries in _________

3)Weighting PPP according to average income of each country obscures income distribution between all the world's people regardless of
which country they live in

Need to look at pay inequality within nations;
take individuals as units, ignoring country boundaries; much more difficult to get
definitive data on this

Back 7

most countries of the world

Front 8

- Slow growth of rural incomes in populous Asian countries as compared to rich OECD countries
- Increasing urban-to-rural income ratio in China
- Hollowing out of “middle class” in Latin America and Eastern Europe

Back 8

1988-1993 – Rising Global Inequality Across Individuals

Front 9

- Rural areas of China and India catching up with rich countries (however, urban income growth in China still faster than rural)
- Real incomes began to recover in Eastern Europe
and former Soviet Union
- Beneficial effects of economic growth in some
countries on poverty reduction have also meant a
reduction across individuals in global inequality
- Within most developing countries (and U.S.),
however, where inequality is not already high, it is
rising
- Although China’s and India’s per capita GDP has been rising fast, median incomes have either stagnated or risen slowly

Back 9

1993-1998 – Slightly Decreasing Global Inequality Across Individuals

Front 10

- Inequality is likely to enhance economic growth; trade-off between augmenting growth and reducing inequality

- Concentration of income among the rich, who save and invest more, will ultimately create jobs

- Inequality creates an incentive for individuals to
work hard, take risks, become entrepreneurial

- Meritocracy: rewards to talent and hard work; we should not be concerned about inequality of outcomes

Back 10

Constructive Inequality

Front 11

- Productive incentive only in places with Scandinavian levels of inequality, not at higher levels, such as in Brazil or United States

- In most developing countries, inequality has a
growth-inhibiting or destructive effect

- Inequality creates a social pathology – an
unequal society is not truly one, but two societies, Plato

- One of the most pervasive forms of inequality is gender discrimination, women increasingly forced into informal sector in many countries)

- Globalization itself contributes to growing
awareness of inequality, regardless of whether
inequality is fact increasing or not

Back 11

Destructive Inequality

Front 12

Global markets reward those
countries and individuals with more of the productive
assets

Back 12

Markets Work

Front 13

In global economy, negative
externalities raise new costs for the vulnerable and
compound risks faced by weak and disadvantaged

Back 13

Markets Fail

Front 14

In global economy, rules of the game benefit those with economic power

Back 14

Rules are Unfair

Front 15

Globalization produces wealth _____ poverty/inequality;
economic reforms have allowed capitalist growth and
innovation, but also have eroded social safety net
and government provisions that protected many people against the worst effects of the capitalist business cycle

Back 15

and

Front 16

Globalization certainly NOT the _________ cause of
poverty and inequality; but what have been _______
effects

Back 16

Initial, recent

Front 17

One cannot assume or prove that fast international trade growth produces fast economic growth

Back 17

Main critism of Assumptions made by Champions of Globalization

Front 18

- Within most developing countries (and (US) however, where inequaltiy is not already high, it is rising

- Although China's and India's per capita GDP has ben rising fast, median incomes have either stagnated or risen slowly

Back 18

1993-1998; Slighly Decreasing Global Inequality Across Individuals

Front 19

Globalization is inherently dis-equalizing

Back 19

True