Abstract
Globalization has increasingly made it possible for labor in developing countries to augment labor in the developed world, without having to relocate, in ways not thought possible only a few decades ago. We argue that this large increase in the developed world's effective labor supply, triggered by geo-political events and technological innovations, coupled with the inability of existing institutions in the US and developing nations themselves to cope with this shock, set the stage for the great recession. The financial crisis in the US was but the first acute symptom.
Original language | English (US) |
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Pages (from-to) | 4-29 |
Number of pages | 26 |
Journal | Journal of Financial Intermediation |
Volume | 22 |
Issue number | 1 |
DOIs | |
State | Published - Jan 2013 |
Keywords
- Financial crisis
- Global imbalance
- Globalization
- Labor supply shock
ASJC Scopus subject areas
- Finance
- Economics and Econometrics