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Evidence on the Contribution of Trade Reform towards International Income Equalization

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  • Ben-David, Dan
  • Bohara, Alok K

Abstract

This paper provides some historical evidence on the impact of trade reform on income disparities between the liberalizing countries. The convergence test developed here 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. We find that countries which embarked on extensive trade liberalization programs exhibited significant income convergence with one another while countries that did not liberalize trade showed no evidence of convergence. Copyright 1997 by Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 5 (1997)
Issue (Month): 2 (May)
Pages: 246-55

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Handle: RePEc:bla:reviec:v:5:y:1997:i:2:p:246-55

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576

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Cited by:
  1. BLUM, Ulrich & DUDLEY, Leonard, 2001. "Religion and Economic Growth: Was Weber Right?," Cahiers de recherche, Universite de Montreal, Departement de sciences economiques 2001-05, Universite de Montreal, Departement de sciences economiques.
  2. David E. A. Giles & Chad Stroomer, 2003. "Does Trade Openness Affect the Speed of Output Convergence? Some Empirical Evidence," Econometrics Working Papers, Department of Economics, University of Victoria 0307, Department of Economics, University of Victoria.
  3. Chad Stroomer & David E.A. Giles, 2003. "Income Convergence and trade Openness: Fuzzy Clustering and Time Series Evidence," Econometrics Working Papers, Department of Economics, University of Victoria 0304, Department of Economics, University of Victoria.

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