2018

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Dimensions of Globalization and their Role in Income Inequality
(UMT, Lahore, 2018-07) Zahida Saleem
The aim of this study is to examine the role of three different dimensions of globalization in observing income inequality in developing countries specially with reference to Pakistan. These dimensions are economic globalization, financial globalization and political globalization. This study utilizes annual time series data for the period 1985 - 2015 for the analysis by using ARDL and ECM testing approach. No doubt globalization has reduced poverty in Pakistan over the past years but it has also created uneven distribution of wealth among the people. Economic globalization creates more income inequality between rich and poor while financial globalization enhances global linkages through cross border capital inflow that attracts foreign direct investment (FDI) in the country which minimizes this gap. However political globalization can be beneficial for multiple tasking in Pakistan. Hence all the dimensions of globalization are beneficial for the country's crisis but financial globalization is more fruitful in both short and long run to reduce the income inequality.