Modelling Global Value Chains

NWO VICI project 2015-2020, nr. 453-14-012, M.P. Timmer

Income inequality is growing around the world, both between and within countries, corroding the fundamental stability of societies. How much of this is due to increasing opportunities for international trade manifested in the rise of global value chains? Standard economic theory maintains that trade potentially benefits all societal groups, yet an urban elite of capital owners and highly-educated workers appear to benefit the most.

The VICI project will address these issues and will provide new insights into the impact of trade on jobs and income inequality, and will result in new models and databases for the study of these important global phenomena. The outcome of the research will identify policy advice at a regional, national and supra-national level on how to handle the increased opportunities to trade, such that benefits are spread more equally.