Is trade liberalization a solution to the unemployment problem?

This paper examines how trade liberalization affects the growth rate of sectoral employment in developed and developing countries. The estimation results imply that trade openness in the form of higher trade volumes has not been successful in generating jobs in developing countries. The overall weak, negative employment response to trade volumes may be explained by the negative output response to trade openness in these countries. Our estimates also indicate that higher trade volumes have adverse effect on industrial employment in developed countries. Moreover, while they have positive effect on employment in industry and services in developing countries, trade barriers have adverse effect on employment growth in services for developed countries. Our overall results imply that while trade barriers have relatively little adverse effects and/or in some case a positive effect on employment both in developing and developed countries, higher trade volumes have an adverse effect on industrial employment in developed economies. Thus, trade openness is not in itself a solution to the unemployment problems of developing countries and yet it has not been the prime factor to blame for the lower employment levels in developed countries.info:eu-repo/semantics/publishedVersio

Low-Income Countries and an SDR-based International Monetary System

The global financial crisis, the weakening role of the dollar and the increasing international importance of China are calling for a reform of the international monetary system in the direction of greater multilateralism. To this end, we advance a proposal based on a greater role of the Special Drawing Rights (SDRs) and focus on the potential benefits that these could bring to Low-Income Countries (LICs). SDRs would be created exogenously - with a disproportionate allocation to LICs -, but also endogenously, through a substitution account and an overdraft facility. Finally, the paper discusses the superiority of this proposal in the context of the current foreign assistance framework

Channels and policy debate in the globalization–inequality–poverty nexus

The paper offers a critical literature review of the debate surrounding the globalization-poverty nexus, focusing on channels through which globalization affects the poor. It examines first the ‘growth’ conduit through which globalization affects poverty. Treating inequality as the filter between growth and poverty reduction, the causal chain of openness-growth-inequality-poverty is scrutinized, link by link. It then examines other channels in the globalization-poverty nexus, such as differential factor movements, the nature of technological change and diffusion, the impact of globalization on volatility and vulnerability, the worldwide flow of information, global disinflation, and institutions. The paper concludes with a discussion of strategic policy issues within the context of the globalization debate