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Globalization, Poverty, and All That: Factor Endowment versus Productivity Views William Easterly1 New York University Abstract: Neoclassical growth models of trade and factor flows based on differences
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Here I examine how growth in endowments of the world's best-performing countries influences the outcome of globalization. I find that factor endowment effects are substantial, and much larger than one would have predicted from theory. The large endowments of Japan, Germany, and the United States explain more than half these factor endowment effects. Moreover, the large component of U.S. factor endowment effects can explain much of the trade and factor flow differences in these countries. The Globalization Trap: Understanding Growth in a Global Economy, edited by Paul Gilding. Ithaca: Cornell University Press, 2004. In The Globalization Trap, Paul Gilding discusses the importance of the productivity-growth link for understanding global growth, arguing that growth in “productivity-enhanced factors” — including capital, labor, and knowledge — generates growth in per capita output even when productivity rises more slowly than in “productivity-neutral factors,” such as food. The book uses the work on cross-country convergence to test Gilding's hypothesis. This chapter uses some case studies from developing countries to test Gilding's hypothesis. Gilding's conclusion is consistent with the growth theory that productivity growth increases income per capita. Gilding and Blythe also find robust results for developed countries and conclude that other factors contribute to convergence in income per capita. “The New Industrial Revolution” in China, China's Economy in the Twenty-First Century, edited by David W. Stick and John Kay. Cambridge: Cambridge University Press, 2006. The article is about the economic implications of the new IT revolution in China, which created the majority of the value added in China from 1980. The article focuses on the importance of information technology, its impact on the labor force, its impact on manufacturing, how the new technologies changed employment, how they changed the business environment, and some economic and social implications. It also focuses on the economic and social impact of “the second industrial revolution,” which began in the late 1950s. (The first revolution, which occurred around 1850, created a tremendous volume of innovation that led to many inventions.) In this article, Stick and Kay also look at the impact of international trade on China and the implications it for the world economy. Empire, Growth, and Development. Harvard University Press, 1990. This book is part of the Cambridge University Press special issues on “Globalization and Change in the Twentieth Century.

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