Global trade has tripled India’s GDP in a generation but workers in the country have been left out, Nobel Prize-winning economist Eric Maskin said on Saturday as he noted that the problem of growing inequality could be more difficult to solve than COVID-19.
Speaking to Ashoka University students almost, he said global trade has brought total prosperity to the emerging economy and increased wages and wage inequality.
“Global trade is three times the size of India’s GDP per generation, which is amazing, but Indian workers are left out,” said Maskin, a professor of Economics and Mathematics at Harvard University.
Noting the increase in inequality in many developing countries, he noted that inequality could not be solved by force in the marketplace.”However, India will still face major challenges, challenges that can be much more difficult to resolve than the disease …. the problem of increasing financial inequality,” he noted.
Maskin pointed out that although the world has seen significant economic growth over the past 25 years, the gap between rich and poor in developing countries has widened.”Proponents of globalization have predicted that globalization will bring prosperity to emerging economies.
And at that point, they were right.”In India, for example, GDP per capita, which is crude but generally prosperous, has grown dramatically since 2000, due to the global market,” he said.
However, Maskin said that according to his supporters, global trade should also reduce financial inequality.”But in many such countries, wage inequality has actually risen. And again, India is a good example,” he said.
A leading economist noted that eradicating poverty is closely linked to inequality and that in developing countries, the fight against poverty is often the best way to fight inequality.
“There is a clear link between inequality and social and political instability. In fact, rising inequalities in countries like Brazil have led to deep political divisions and increasing dictatorships,” he said.
Maskin argued that the fight against inequality should be a key element of the policy of keeping social and political development together.He said the reasons for the global increase included a reduction in travel costs, a decrease in trade prices, a decrease in communication costs.
Noting that although the doctrine of Comparative Advantage has not been very successful in recent times, he said, “stopping global trade seems problematic as it has brought complete prosperity to the emerging economy.
“Maskin has contributed to the concept of the game, the contractor, the belief in free will, the political economy, and other economic spheres. In 2017, he was awarded the Nobel Memorial Award in Economics (with L. Hurwicz and R. Myerson) for laying the foundations for the mechanization of machinery.