Unit V: Income inequality in the southern cone (Bertola)

Question 1

What period does the paper estimate income inequality in the Southern Cone?

Answer 1

Around 1870 and 1920

The Southern Cone includes Brazil, Chile, Uruguay, and Argentina.

Question 2

Was income inequality in the Southern Cone solely a result of globalization?

Answer 2

No, it was also a structural feature that existed before globalization.

Question 3

What general trend in income inequality was observed in the Southern Cone between 1870 and 1920?

Answer 3

Inequality generally increased both within and between countries.

Question 4

What factors influenced the impact of globalization on inequality in the Southern Cone?

Answer 4

• Frontier expansion
• Institutional persistence and change

Question 5

What was high inequality in the wake of globalization linked to?

Answer 5

• Export of primary goods
• Sluggish technological change
• Limited human capital formation

Question 6

What debate does the paper explore regarding the origins of Latin American inequality?

Answer 6

• Colonial roots versus the impact of globalization

Question 7

How did colonial development patterns influence globalization’s effects in the Southern Cone?

Answer 7

They shaped how globalization affected each country.

Question 8

What does the Inequality Possibility Frontier (IPF) approach suggest about Brazil and Chile before globalization?

Answer 8

They were rich enough to sustain high inequality levels.

Question 9

What technological changes drove the first globalization boom?

Answer 9

Technological changes in transport.

Question 10

What position did elites hold during the first globalization boom?

Answer 10

Their position was strengthened, contributing to high-income inequality.

Question 11

By 1870, how did Latin America’s income inequality compare to other regions?

Answer 11

It was already high compared to other regions.

Question 12

What contributed significantly to the total increase in inequality in the Southern Cone?

Answer 12

The increase in between-country inequality due to different growth rates.

Question 13

What pattern of economic specialization affected long-term growth prospects in the Southern Cone?

Answer 13

Specialization in natural resource exploitation limited innovation and technical change.

Question 14

What were the three main processes of transition during the first globalization period?

Answer 14

• Liberal reforms
• Abolition of slavery
• Appropriation of new frontier land

Question 15

How did the authors redefine globalization in their analysis?

Answer 15

As the expansion of the North-Western European frontier to new regions.

Question 16

What methodology did the authors use to estimate income inequality for 1870 and 1920?

Answer 16

They compiled databases based on census data and historical sources.

Question 17

What was the impact of the agrarian frontier expansion on income inequality?

Answer 17

It led to population shifts and changes in income distribution.

Question 18

How did Argentina’s and Brazil’s income inequality trends differ between 1870 and 1920?

Answer 18

Argentina experienced a significant increase, while Brazil’s decreased.

Question 19

What does the authors’ analysis suggest about the nature of growth during the first globalization boom?

Answer 19

It was based on primary resource exports with limited technological change.

Question 20

What is the significance of the ‘commodity lottery’ in the context of income inequality?

Answer 20

It influenced demand and prices for natural resources, affecting income distribution.

Question 21

True or False: The authors argue that the impact of globalization on inequality was uniform across the Southern Cone.

Answer 21

False

Question 22

What was the level of income inequality in the Southern Cone around 1870?

Answer 22

Income inequality was already relatively high, indicating structural features rooted in colonial heritage.

Estimates placed the Gini coefficients for these countries at levels that were high compared to other regions of the world at the time.

Question 23

How did income inequality in the Southern Cone change from 1870 to 1920?

Answer 23

Income inequality generally increased during this period, both within and between countries, coinciding with economic expansion driven by primary goods exports.

The increase depended on factors like agricultural frontier expansion and the persistence of existing institutions.

Question 24

Did globalization have a straightforward impact on income inequality in the Southern Cone?

Answer 24

No, the impact was mediated by various factors, including integration methods and existing social and political institutions.

Globalization often reinforced elite power and exacerbated inequality.

Question 25

What role did colonial heritage play in shaping income inequality during globalization?

Answer 25

Colonial heritage laid the groundwork for high inequality through concentrated land ownership and hierarchical social structures. ## Footnote Export-oriented growth spurred by globalization often strengthened the position of elites.

Question 26

How did the expansion of the agricultural frontier affect income inequality?

Answer 26

It had varied impacts; in Argentina and Uruguay, it allowed family farms to develop, potentially mitigating inequality, while in Chile, initial reductions were offset by strengthening elite power. ## Footnote Land appropriation still reflected colonial patterns, leading to differences in income distribution.

Question 27

How does the Southern Cone's income inequality compare to other regions like Europe?

Answer 27

Income inequality was relatively high in the Southern Cone compared to some European regions by 1870, and this position worsened over time. ## Footnote High inequality persisted in Latin America while Europe experienced a reversal in the 20th century.

Question 28

Was the economic growth during the first globalization boom conducive to long-term development and reduced inequality?

Answer 28

No, the growth was based on resource exploitation with limited technological change, reinforcing existing inequalities rather than ensuring equitable development. ## Footnote This left the region vulnerable to fluctuations in world commodity markets.

Question 29

What are the key conclusions regarding income inequality in the Southern Cone between 1870 and 1920?

Answer 29

Income inequality was high before the globalization boom, generally increased during it, shaped by globalization forces, colonial legacies, and patterns of economic specialization. ## Footnote Globalization's impact was not uniform and often reinforced existing inequalities linked to elites.

Question 30

Define the term 'First Globalization Boom'.

Answer 30

A period of significant increase in international trade, investment, and migration from the 1870s to World War I. ## Footnote Driven by technological advancements in transportation and communication.

Question 31

What does 'Income Inequality' refer to?

Answer 31

The extent to which income is distributed unevenly among a population. ## Footnote Measured using metrics like the Gini coefficient.

Question 32

What is the 'Inequality Possibility Frontier' (IPF)?

Answer 32

A theoretical curve showing the maximum possible level of income inequality for a given level of average income. ## Footnote Based on the idea that at very low income levels, there isn't enough surplus to allow for extreme inequality.

Question 33

What is the 'Gini Coefficient'?

Answer 33

A statistical measure of income inequality, ranging from 0 (perfect equality) to 1 (perfect inequality).

Question 34

What does 'Peripheral Capitalism' describe?

Answer 34

A type of capitalist development in Latin America characterized by dependence on the export of primary goods. ## Footnote Often linked to vulnerability to the global economy.

Question 35

What is 'Import-Substituting Industrialization' (ISI)?

Answer 35

An economic policy aimed at promoting domestic industrial growth by restricting imports of manufactured goods.

Question 36

What does the 'Stolper-Samuelson Theorem' state?

Answer 36

Opening to international trade will raise the return to a country's relatively abundant factor and lower the return to its relatively scarce factor.