The social dimension of globalization: A review of the literature

With globalization affecting so many inter-connected areas, it is difficult to grasp its full impact. This literature review of over 120 sources considers the impact of globalization on wages and taxes, poverty, inequality, insecurity, child labour, gender, and migration. Opening with some stylized facts concerning globalization in 1985-2002, the authors then highlight recent findings on these areas, reporting on controversies and on emerging consensus where it exists. There follows a review of national and international policy responses designed to make globalization more sustainable and equitable and to deliver decent jobs, security and a voice in decision-making

Market Sentiment and Macroeconomic Fluctuations under Pegged Exchange Rates

The effects of an adverse change in market sentiment, defined as a temporary increase in the premium faced by domestic borrowers on world financial markets, are studied in an intertemporal optimizing framework with imperfect capital mobility. Firms' demands for working capital are financed by bank credit. The shock leads to a rise in domestic interest rates, capital outflows and a drop in official reserves, a reduction in bank deposits and loans, a contraction in output, and an increase in unemployment. These predictions are consistent with Argentina's economic downturn in the immediate aftermath of the Mexican peso crisis of December 1994. Copyright (c) The London School of Economics and Political Science 2006.