Threat Effects and the Impact of Capital Mobility on Wages and Public Finances: Developing a Research Agenda

The impact of increased openness to trade, financial flows and foreign direct investment on the distribution of costs and benefits from globalization remains a controversial and poorly understood subject, despite an enormous amount of research undertaken by economists and other social scientists in recent years.(See, Baker, Epstein, Pollin, 1998; Journal of Economic Perspectives, 1995 for recent discussions of many of these issues). Among the most important and most studied issues is the impact of globalization on inequality and the related issue of the impact of globalization on the roles governments choose to play and on their ability to achieve their goals