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Trade Liberalization and Income Equalization: A Long-Run Perspective

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  • Ben-David, Dan
  • Bohara, Alok K.

Abstract

An examination of the impact of trade reform on the behavior of income differentials among countries provides the setting for the utilization of an income convergence test that differs from the conventional cross-country regressions. The existence, or non-existence, of convergence involves joint estimation of augmented Dickey-Fuller type equations using seemingly unrelated regression (SUR) techniques. Monte Carlo simulations are used to calculate the critical values which are in turn used to determine the significance of convergence. The findings here provide support for a link between trade liberalization and income convergence.

Suggested Citation

  • Ben-David, Dan & Bohara, Alok K., 1995. "Trade Liberalization and Income Equalization: A Long-Run Perspective," Foerder Institute for Economic Research Working Papers 275610, Tel-Aviv University > Foerder Institute for Economic Research.
    • Handle: RePEc:ags:isfiwp:275610
    DOI: 10.22004/ag.econ.275610
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Financial Economics; International Relations/Trade;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General

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