Chapter 17 - Trade and Cultural Diversity

Abstract

This chapter surveys the recent economic literature on the relationships between globalization and cultural diversity. We first review the different channels through which international integration interacts with cultural diversity across individuals, communities, and nations. We then present some recent formal economic models of cultural transmission and cultural evolution, and show how these models can be embedded into standard economic frameworks to analyze the links between globalization and cultural diversity. The chapter then presents various applications from trade in cultural goods, foreign direct investment in tourism to cultural integration of foreign migrants. Finally, normative implications and the relationships between cultural policy and international policies are also discussed.