Review by Choice Review
In the US, there is a backlash against free trade. Many believe globalization is responsible for rising income inequality. The central purpose of this book is to clarify that this belief is not based on evidence. Helpman (Harvard) begins by noting how researchers initially used the Heckscher-Ohlin framework to explain the wage gap between college and high school graduates. This framework did not explain much of the gap, and it seemed as though skill-biased technical change was responsible for much of the change in wage patterns. Hence, scholars incorporated matching theory into trade models to better understand how wages responded to international conditions. Unfortunately, these richer models also explained a small fraction of the observed data. Helpman discusses the explanatory power of models in which firms are the unit of analysis. Although these models have provided useful results, readers learn that trade and offshoring have played a small role in contributing to income inequality. Although questions about the interactions between trade and inequality remain, Helpman concludes that the existing evidence does not support the position that increasing free trade has given rise to growing inequality. Summing Up: Highly recommended. Upper-division undergraduates through faculty.--Amitrajeet A. Batabyal, Rochester Institute of Technology
Copyright American Library Association, used with permission.
Review by Choice Review
