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Guest Lecture: Professor David GreasleyGlobalisation and Wages: some lessons from history

Page updated 20 Sep 2007

Notes from Professor David Greasley's Guest Lecture presented at the Treasury on 18 March 2003.

Professor David Greasley

University of Edinburgh

Notes

Lessons of Economic History (Taken from David Greasley's notes)

  • Migration tends to equalise wages internationally, but had little effect in the case of New Zealand.
     
  • Trade increased the relative value of the abundant factor, land in the case of New Zealand.
     
  • Globalisation benefited New Zealand.
     
  • Between 1870-1913:
    • 1/3 real wage growth from productivity;
    • 1/3 from improved terms of trade;
    • 1/3 from redistribution towards labour
  • Between 1890-1913 landowners gained most from trade.
     
  • Globalisation can have powerful and detrimental effects on income distribution, eg when land ownership is concentrated.
     
  • Globalisation creates opportunities, outcomes depend on factor endowments broadly defined, including skills and enterprise.
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