ETD

• Globalization’s Hidden Cost

Globalization, through the progressive opening of markets and the increasing flows of goods, capital, information, and people, has profoundly reshaped the world economy. It has promoted growth and innovation, but it has also produced structural imbalances and exposed persistent inequalities in the distribution of wealth. These contrasting effects have driven an ongoing debate in economics: does globalization promote inclusive development, or does it primarily benefit a narrow segment of society? This thesis focuses on China, a country whose rapid economic transformation provides a particularly relevant context for examining the distributional effects of globalization. For centuries, China’s development was constrained by demographic pressures and agricultural limits, consistent with the Malthusian Trap. This situation changed in 1978, when market oriented reforms under Deng Xiaoping initiated rapid industrialization, urbanization, and
integration into global trade. By 2009, China had surpassed Germany to become the world’s largest exporter, highlighting the extraordinary speed with which it shifted from a rural, agrarian system to a central actor in the global economy. The research has two main objectives. First, it presents an empirical analysis of economic inequality in China, using indicators such as the Gini coefficient and the income shares of the richest 1% and the poorest 50%. This analysis evaluates whether the gains from globalization have reached marginalized populations or remained concentrated among those with pre-existing access to capital and resources. Second, the study introduces and applies the Boltzmann Wealth Model to this context, providing a theoretical and computational framework to analyze wealth dynamics and the potential impact of policy interventions. The findings suggest that while globalization has driven remarkable economic growth, its benefits have been distributed unevenly. Rural and low-income populations remain largely marginalized. Simulations using the Boltzmann Wealth Model highlight the importance of
redistributive policies and suggest the possibility of a more balanced and inclusive devel
opment trajectory. The thesis is structured as follows. Chapter 1 reviews globalization from historical, theoretical, and empirical perspectives. Chapter 2 examines China’s economic rise, focusing on both its role in global trade and the internal distribution of its gains. Chapter 3 presents the empirical analysis of inequality. Chapter 4 develops the theoretical foundations of the Boltzmann Wealth Model, detailing its assumptions and mechanisms. Chapter 5 applies
the model to the Chinese case and explores the effects of taxation and redistribution poli
cies. The conclusion reflects on whether globalization inevitably generates inequality or
whether policy choices can foster a more balanced and sustainable development path.