Regional differences in developed countries, the cause is not international trade, but technological progress = IMF

[Denver 9th Reuters]-The International Monetary Fund (IMF) is a report released on the 9th, and it is not international trade that has been the main cause of regional disparities spreading in developed countries, but technologies such as automation and productivity. He expressed his view of the degree of progress in terms of the aspect.

According to the report, “trade shocks generally do not appear to have led to differences in labor market performance between lagging regions and other regions, while technology shocks are unemployed in regions that are susceptible to automation. ”, Especially hitting more vulnerable areas.”

Although the IMF believes that the concentration of employment and wealth in some parts of the country can be seen as a “general characteristic of growth” that will ultimately benefit others, the current process of concentration in developed countries has slowed or Pointed out that it has stopped.

Regions facing “sustained inefficiency” are at risk of being permanently left behind, with “the potential to cause dissatisfaction and political polarization, undermine social trust and threaten national unity” .

In the United States, dissatisfaction with jobs being taken away by trade and the influx of immigrants increased among workers, leading to the victory of Mr. Trump in the 2016 presidential election. Mr. Trump has announced a protectionist trade and tariff policy that will lead to the expansion of employment in the US manufacturing industry.

However, according to the IMF, the fundamental factors causing economic disparities between regions are technology and automation, and it is not trade issues that must be addressed.

The IMF supports a “place-based” policy that is gaining attention among economists, focusing on a region-focused approach facing severe economic conditions.

If the policy is properly formulated, it will work effectively, especially in the United States, where the social security base is weak compared to European countries.