An Alternative Explanation: Globalization Technology isn’t the only thing transforming the economy. The other big force of our era is globalization. Could this be the reason that median wages have stagnated in the United States and other advanced economies? A number of thoughtful economists have made exactly that argument. The story is one of factor price equalization. This means that in any single market, competition will tend to bid the prices of the factors of production—such as labor or capital—to a single, common price.* Over the past few decades, lower transaction in communication costs
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