Globalization, Trade, and Income

My purpose in this paper is to address two questions that confront our discipline repeatedly these days. First, what is a useful classification of the symptoms and the determinants of 'globalization' a phase used in a remarkable variety of contexts. To economists globalization is generally thought of as the increasing internationalization of the production, distribution, and marketing of goods and services. The term is used less precisely in the popular literature, perhaps best exemplified by Kenichi Ohmae's book The Borderless World, and when used loosely it invokes a wide variety of political, sociological, environmental, and economic trends that are the concern of media attention almost daily. However one defines globalization it is surely a development that is having a profound impact on the subject of economics as a whole and ought to have on the field of international economics in particular. My second purpose is to ask how globalization is affecting our profession's view of theory and empirical work in international economics. Traditional trade theory was concerned with a set of fairly well-defined questions regarding the determinants of trade, the pattern of trade, and the welfare consequences of various trade policy instruments. The last two decades and perhaps the last decade in particular has led to a much wider interpretation of what living in an 'open economy' means. The change that is occurring on a wide range of economic, social, scientific, and