GLOBALIZATION IMPACT ON INCOME INEQUALITY DISTRIBUTION (EUROPEAN UNION)
Research Article
GLOBALIZATION IMPACT ON INCOME INEQUALITY DISTRIBUTION (EUROPEAN UNION)
ABSTRACT
The conclusions presented on the effects of increasing globalization and the inequality of income distribution is not consensual. With this paper it is intended to contribute to the clarification of this relationship, particularly with regard to the effects of the economic aspect of integration at the European Union (EU) during the period of 1995 to 2018. In this sense, an adequate review of theoretical and empirical literature is carried out, as well as the realization of an econometric application. The 19 EU countries considered in the sample were divided into two subsamples, “North” and “South” countries, taking into account a benchmark for the level of real GDP per capita. In a complementary way, it is still an objective of this paper to try understand if the Great Recession, initiated in 2008-09, has impact on globalization on inequality and through what mechanisms, since the literature reports persistent effects of periods of recession on inequality. The main results suggest that, since 1995, international trade has decreased the inequality in income distribution in the two groups of countries, while the financial globalization, through the entry of FDI, has provoked this inequality in the group of “Northern” countries. Regarding to the effect of the crisis in 2008- 09 financial report, it is concluded that: on one side, economic globalization, after the crisis, eased the inequality in the income distribution in both groups of countries; on the other hand, after the recession, social integration contributed to the worsening of this inequality, both in the countries of the "North" and in the countries of the "South".
MIHAJLOVSKA, A.,
(2021). GLOBALIZATION IMPACT ON INCOME INEQUALITY DISTRIBUTION (EUROPEAN UNION). Trends in Economics, Finance, and Management Journal, 3(1), 98-109. Arrival Date Posted By:https://tefmj.ibupress.com/articles/globalization-impact-on-income-inequality-distribution-european-union-
