Welfare-State Remedy to Globalization and Aging Forces

45 Pages Posted: 25 Jun 2018

See all articles by Assaf Razin

Assaf Razin

Tel Aviv University

Efraim Sadka

Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: June 2018

Abstract

Globalization, in the form of financial flows, which is always advantageous on an aggregative level, typically creates winners and losers, if left exclusively to market forces. The paper demonstrates that typical welfare-state redistribution policies, governed by a majority of the population, spreads the globalization’s gains from trade to all income groups, even those who are low skilled and have small capital endowments. Therefore, financial globalization of a welfare-state economy generates a Pareto improvement.

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Suggested Citation

Razin, Assaf and Sadka, Efraim, Welfare-State Remedy to Globalization and Aging Forces (June 2018). NBER Working Paper No. w24754. Available at SSRN: https://ssrn.com/abstract=3202059

Assaf Razin (Contact Author)

Tel Aviv University ( email )

Efraim Sadka

Tel Aviv University - Eitan Berglas School of Economics ( email )

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IZA Institute of Labor Economics

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