A Primer on Trade and Inequality

Abstract

Economists have generally underplayed until recently globalization’s role in exacerbating inequality in the advanced economies. But in the public imagination globalization’s adverse effects have loomed much larger, significantly contributing to the backlash against the political mainstream and the rise of far-right populism. The literature on trade and inequality is in fact exceptionally rich, with important theoretical insights as well as extensive empirical findings covering recent experience. In this essay I will summarize a few key takeaways.