Gallagher Publishes Book Chapter on Global Inequality
Kevin Gallagher, Director of the Global Development Policy (GDP) Center and Professor of Global Development Policy at the Frederick S. Pardee School of Global Studies, has published a chapter on global inequality in a new book by Columbia University Press.
The chapter, “Capital Openness and Income Inequality: Smooth Sailing or Troubled Waters,” is co-authored with Guillermo Lagarda and Jennifer Linares of the Inter-American Development Bank and included in the book International Policy Rules and Inequality: Implications for Global Economic Governance.
Gallagher and co-authors conduct an big data econometric exercise and find that the the deregulation of cross-border financial markets in a developing economy lessens inequality during an economic boom period, but significantly increases inequality during busts. Moreover, the group finds that regulating financial markets during busts lessens the downward pressure on inequality.
This work has important lessons for policy—unbridled financial markets can accentuate inequality over time and that nations need the institutional capability and policy space to regulate such financial markets. Given that an increasing number of trade and investment treaties make it more difficult to regulate cross-border financial markets our systems of global economic governance may yield more inequality and instability. Moving forward, trade and investment treaties need reform to allow nations the policy space to regulate cross-border finance.
Gallagher serves on the United Nations’ Committee for Development Policy and co-chairs the T-20 Task Force on International Financial Architecture at the G-20. He previously served on the investment sub-committee of the Advisory Committee on International Economic Policy at the US Department of State and on the National Advisory Committee at the Environmental Protection Agency. Gallagher has been a visiting or adjunct professor at the Paul Nitze School of Advanced International Studies at Johns Hopkins University, the Fletcher School of Law and Diplomacy at Tufts University; El Colegio de Mexico in Mexico; Tsinghua University in China, and the Center for State and Society in Argentina. @KevinPGallagher