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North-South Trade and Income Inequality

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  • Choi, E. Kwan

Abstract

This paper investigates the effects of North-South trade on international income inequality. While empirical studies suggest that trade liberalization encourages income convergence and reduces the per capita income gap between poor and rich countries, North-South trade is shown to increase the income gap between the two regions. On the other hand, trade liberalization by either region increases the welfare of both regions, and does not necessarily reduce the gap in ﾓreal incomeﾔ or utility.

Suggested Citation

  • Choi, E. Kwan, 2007. "North-South Trade and Income Inequality," Staff General Research Papers Archive 12788, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:12788
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    References listed on IDEAS

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    1. Chao, Chi-Chur & Chou, W. L. & Yu, Eden S. H., 2001. "Export Duty Rebates and Export Performance: Theory and China's Experience," Journal of Comparative Economics, Elsevier, vol. 29(2), pages 314-326, June.
    2. Ann L. Owen, 1999. "International Trade and the Accumulation of Human Capital," Southern Economic Journal, John Wiley & Sons, vol. 66(1), pages 61-81, July.
    3. Chi-Chur Chao & Eden S. H. Yu, 1997. "Trade Liberalization in Oligopolistic Competition with Unemployment: A General Equilibrium Analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 30(2), pages 479-496, May.
    4. Bruce Elmslie, 1994. "The Endogenous Nature of Technological Progress and Transfer in Adam Smith's Thought," History of Political Economy, Duke University Press, vol. 26(4), pages 649-663, Winter.
    5. Ianchovichina, Elena, 2001. "Trade Liberalization in China’s Accession to WTO," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 421-445.
    6. Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    7. Choi, E. Kwan, 2001. "Neighbor-Immiserizing Growth: The Asian Crisis," Staff General Research Papers Archive 5146, Iowa State University, Department of Economics.
    8. Slaughter, Matthew J, 1997. "Per Capita Income Convergence and the Role of International Trade," American Economic Review, American Economic Association, vol. 87(2), pages 194-199, May.
    9. Matthew J. Slaughter, 1997. "Per Capita Income Convergence and the Role of International Trade," NBER Working Papers 5897, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Choi, E. Kwan, 2010. "International trade in genetically modified products," International Review of Economics & Finance, Elsevier, vol. 19(3), pages 383-391, June.
    2. Mandal, Biswajit & Marjit, Sugata, 2010. "Corruption and wage inequality?," International Review of Economics & Finance, Elsevier, vol. 19(1), pages 166-172, January.
    3. Park, Na Young, 2020. "Trust and trusting behavior in financial institutions: Evidence from South Korea," International Review of Economics & Finance, Elsevier, vol. 67(C), pages 408-419.

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