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Department of Economics

Globalization perspectives

Economic issues deal with the most diverse aspects of globalization. In this contribution, researchers from our department examine different aspects of this extensive topic.

Our everyday lives are permeated by globalization in many ways: whether it’s eating exotic fruits for breakfast, checking international share prices on our smartphones, booking an apartment for our next vacation on AirBnB, thinking about the causes of political polarization or choosing between a bottle of wine from California and one from Burgenland. Almost everything we do forms part of this global network. This is particularly true of economic issues that deal with the most diverse aspects of globalization. We have selected a few of these and interviewed professors in the department about them.

Can global digital platforms be regulated?

Few things epitomise globalization like online marketplaces, where goods and services can be ordered at the click of a mouse. From a consumer protection perspective, these platforms differ from traditional markets in key respects that are not regulated by existing competition law and can be exploited by operators. They collect huge amounts of data, with considerable potential for exploitation. The selection architecture of the website can be designed in such a way that users are specifically guided and manipulated. The lack of direct contact makes returns and complaints processes more difficult for retailers and buyers, and an unclear distinction between sponsored and editorial content undermines competition law provisions. Large, global platforms are particularly affected by these problems.

There are already regulatory proposals that can close gaps with minor amendments to the law so that digital markets can operate in the interests – and for the benefit – of civil society.


Gregory Crawford

Fields of research: Empirical Industrial Organization, Antitrust/Competition Policy, Media Economics


What lies at the heart of the globalization crisis?

We have long known that trade creates winners and losers. However, the impact on inequality is much greater than originally thought. Given the significant imports of goods from China, the benefits in the form of low consumer prices are relatively evenly distributed across the population, while the disadvantages due to the loss of industrial jobs are very heavily concentrated in individual population groups and geographical regions. You could therefore say that inequality has increased to an extent that was not expected, and that leads to political conflicts between winners and losers.



David Dorn

Fields of research: Labor Markets, Globalization, Technological Change and Innovation


Global poverty has been massively reduced

Dina Pomeranz conducts research into low- and middle-income countries. Around 85 per cent of humanity lives in these so-called developing countries. She finds the economic developments taking place in these countries particularly exciting. "Global poverty has fallen more sharply in the last 25 years than ever before in human history." While almost a third of the world’s population lived in extreme poverty back in 2000, today it is only around 8 per cent. At the same time, access to education, healthcare and telecommunications has increased rapidly. "The world is moving closer together," says Pomeranz. "It is fascinating to investigate how these positive trends can be strengthened further."


Dina Pomeranz

Fields of research: Development Economics, Public Finance, Impact Evaluations


Could a global tax system reduce corporate tax avoidance?

A global approach that eliminates all tax competition between countries is unrealistic. One interesting idea is the destination-based cash-flow tax (DBCFT), which taxes the cash flow generated locally rather than the corporate profit arising at the company’s headquarters. Companies pay taxes in the countries in which they generate sales, regardless of where they are headquartered. Expenses for goods and inputs purchased domestically can be deducted, while exports are not taxed. Equity investments are more attractive than debt capital.

The DBCFT would represent a paradigm shift in corporate taxation, and there would be a number of hurdles to overcome. It would have to be carefully designed so that the implicit import duties and export subsidies comply with WTO trade rules. However, gradual reforms are certainly possible: a similar system is being introduced for large multinational companies as part of the OECD minimum tax.   


Florian Scheuer

Fields of research: Pubic Finance, Taxation, Inequality


Is the liberalisation of capital movements bad for investors?

The liberalisation of capital flows means that movements on domestic stock markets correlate more strongly with movements on international markets. The more open the capital market, the stronger the correlation and the smaller the diversification benefits. This means that investors can generate lower returns in open markets than in less open ones. This effect is amplified because globalization ensures that economic fundamentals correlate more strongly between countries.




Joachim Voth

Fields of research: Cultural Economics, Long-Run Grwoth, Asset Market Volatility, Living Standards


Weiterführende Informationen

This article was first published in the .inspired Magazin No. 19 (in German).