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Title:It's a big world after all PDF Logo
Authors:Brakman, Steven
van Marrewijk, Charles
Issue Date:2007
Series/Report no.:CESifo working paper 1964
Abstract:Thomas Friedman’s book the world is flat has been a bestseller since it appeared in 2005. The remarkable success of the book reflects to a certain extent the present fears with respect to increasing globalization. Using many examples, Friedman argues that distance (however defined) is no longer a dominant characteristic of the world economy, or will cease to be so in the very near future. Competition is thought to be a race to the bottom, with the lowest-wage countries as the big winners. We disagree, and with us many other economists (see, for example, Leamer, 2006). Distance dominates all aspects of international trade and many stylized facts of international trade can only be understood by pointing towards the importance of distance. Furthermore, there is little evidence of income convergence. Using various methods and data sets, we show that many threats of global competition for the position of the traditionally developed (OECD) countries are unwarranted.
JEL:E00
F00
N00
O00
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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