Trade, Technology, Income Distribution and Growth

Trade Liberalization and Income Distribution

Empirical work relating trade liberalization and income distribution has identified an important anomaly. The Stolper-Samuelson theorem predicts that trade liberalization will shift income toward a country’s abundant factor. For developing countries, this suggests liberalization will principally benefit the abundant unskilled labor. Yet extensive empirical studies have identified many cases wit...

Bilateral Trade Flows and Income Distribution Similarity.

Current models of bilateral trade neglect the effects of income distribution. This paper addresses the issue by accounting for non-homothetic consumer preferences and hence investigating the role of income distribution in the context of the gravity model of trade. A theoretically justified gravity model is estimated for disaggregated trade data (Dollar volume is used as dependent variable) usin...

Interaction Of Income Distribution, Taxes And Economic Growth

Asymmetric Trade Costs, Trade Imbalances, and the World Income Distribution

Earlier work by Waugh (2010) suggests that asymmetric market access costs across exporting countries are a major reason for differences in real per-capita income around the globe: 25% − 50% (depending on the measure) of world income inequality could be explained by cross-country trade cost asymmetries alone. We show that these results were driven by what we call model under-specification, an il...

Openness of Trade, Unemployment and Inequality of Income Distribution: Comparison between Developed and Developing Countries

In the discussions of trading, unemployment and income distribution inequality, this question is raised by economists that in economic development of developing and developed countries, which policy is necessary in the first stage. Is trading liberalization the pre-requirement of transfer from a close economy to a relative open economy and is it necessary for the developed economy compared to o...