In its new World Economic Outlook the International Monetary Fund looks at the politically freighted question of globalisation and inequality. Scanning press accounts of the document I thought for a moment there must be two such publications. The study I had read was not what others were writing about. Instead it turns out that we all read the same report, and that I do not know a story when I see one.
“IMF Fuels Critics of Globalisation,” was the headline in the Wall Street Journal. “Technology and foreign investment are making income inequality worse around the world, the IMF said in a new report, handing critics of globalisation a powerful argument to use in their political battles,” the article began. Subtracting a little from that powerful argument are the study’s main findings. First, incomes of the poor are rising around the world, in industrial and developing countries alike. Second, liberal trade reduces inequality – again, in poor countries as well as in rich countries. Third, technology not globalisation in its own right is the principal driver of inequality. If this report helps the critics of globalisation, you have to wonder what it would take to shut them up.