Globalization is a central topic of current economic and public debate. The term glob­alizatio n is associated with the increase of tradevolumes,investmentflows, outsourcing activities and the expansion of multinational enterprises. However, a commonly accepted definition does not exist and other characterizations intertwine different contemporaneous trends, such as,increased transport facilities, faster and cheaper communication technologies, changes in labor conditions, and even cultural change. No matter which definition is used, there is a common urge to know how globalization affects our economic and social conditions. Trade liberalization is a main component of economic globalization and as such, there is much interest about the positive and negative effects it may cause. However, tradepolicy reforms have been a recurring public issue for over a century and economic integration between developed countries had already expanded significantly during the post war period. The interesting new element associated with globalization is the ever-increasing integration of developing countries into the process, which has been clearly noticeable since the 1980s. Inaddition, the recent spell of wage inequality and unemployment in OECD countries has added interest to the consequences of trade openness. As with any critical and heavily disputed public issue, many diverse and contradictory opinions exist. Mainstream economists and financial international organizations claim that trade liberalization and capital mobility have increased economic growth in those countries that have successfully integrated into the worldeconomy. Moreover,these improved economic conditions have allowed these developing countries to reduce poverty (WorldBank,2002).

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Erasmus University Rotterdam
Tinbergen Instituut Research Series
Erasmus School of Economics

Rojas-Romagosa, H. (2005, January 27). Essays on Trade and Equity (No. 349). Tinbergen Instituut Research Series. Retrieved from