How Digitalisation and International Trade Foster (Regional) Inequality – and What Policymakers Could Do About It

In most industrialised countries, differences in economic outcomes between regions are just as pronounced as differences between countries. Since these disparities are linked to divergence in many other outcomes, from health and mortality to family formation and politics, it is important to understand the sources of these inequalities and possible ways how to reduce them. Increasing international trade volumes and technological progress are among the most important trends in the past decades, which have also contributed substantially to the manifestation of regional disparities. In this talk, I will discuss the evidence on the causal effects of increasing trade with China and Eastern Europe as well as the increasing use of industrial robots on (regional) inequality. These insights lead to conclusions on how policymakers could react to those trends.