Globalization, Article Critique Example

The journal article written by Kremer and Maskin (2006) covers the challenges of globalization. The authors argue that the greatest obstacle in front of all efforts to create a global economy is inequality. (p. 1.) The authors conclude that due to globalization, the inequality would rise in rich (economically stable) countries while it would get reduced in poorer countries. Although the authors cover the inequality within countries, as well as the effect of different wages on the global economy, and the conclusion states that there is no evidence suggesting that the inequalities are reduced in developing countries due to globalization at all, or the Heckscher-Ohlin model works.

The authors use a two-country framework to prove their argument. Although the comparisons of workers’ skills and opportunities would be matched before and after the globalization, the framework only uses assumptions. Measuring real income levels and life standards, for example, within the countries recently joined the European Union would provide a more reliable data for proving the statement.

The authors also argue that the increase of inequality is a result of additional matches brought in by globalization. (p. 17.) Still, assuming that lower skilled workers might not be involved in international matching is not completely reliable. There is a great source of Polish seasonal workers entering the European Union in the agriculture, and they can be matched to other low skilled workers. On the other hand, some of these people might be highly skilled, still the wages of seasonal farm work would be higher in a different country than their salary for their high skilled jobs in their own homeland.

The assumption that there are only two types of workers in each country (p.18) would reduce the reliability of the study. Using scenario analysis (Keat et al. 2011. Ch., 12) would make the data more reliable.

The article offers an interesting framework for determining the reason for the rise of inequality within poor countries after globalization. Still, as the framework uses too many generalized assumptions, until the results can be confirmed by figures and research, it stays a provisional model.

References

Keat, P., Young, P., Banerjee, S. (2011) Managerial Economics: Economic Tools for Today’s Decision Makers, Sixth Edition.

Kremer, M., Maskin, E. (2006) Globalization and Inequality. Harvard Publication. Online. <http://www.economics.harvard.edu/faculty/kremer/files/GlobalizationInequality_Oct06.pdf>