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The
increasingly globalised economy seems
to produce opposite effects of what standard
economic theory predicts. Instead of a
convergence of world income (towards factor-price
equalisation), a group of rich nations
show a tendency to converge, another convergence
group of poor countries gathers at the
bottom of the scale. This paper explains
the mechanisms and the economic policies
that create this type of gap in the living
standard of workers in the non-tradable
service sector.
August 25, 2003. |
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