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Changes in income inequality and the black market premium

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  • Kevin Sylwester
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    Abstract

    Is a high black market premium for US dollars associated with rising or falling income inequality within a nation? This paper empirically examines this issue within a cross section of countries and finds that the black market premium is strongly associated with rising income inequality as measured by changes in the Gini coefficient. Others have used the black market premium as a proxy to measure protectionist policies so a possible implication is that protectionist policies further skew the distribution of income within a country. However, other measures of protectionist policies are not associated with changes in income inequality. Instead, other factors which might drive the black market premium such as interest rate differentials appear to be more relevant in explaining why the black market premium is positively related with increases in income inequality.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/00036840210134530
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 35 (2003)
    Issue (Month): 4 ()
    Pages: 403-413

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    Handle: RePEc:taf:applec:v:35:y:2003:i:4:p:403-413

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    1. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    2. Roland Benabou, 1996. "Inequality and Growth," NBER Working Papers 5658, National Bureau of Economic Research, Inc.
    3. Jeffrey D. Sachs & Howard J. Shatz, 1994. "Trade and Jobs in Manufacturing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1), pages 1-84.
    4. Pritchett, Lant, 1996. "Measuring outward orientation in LDCs: Can it be done?," Journal of Development Economics, Elsevier, vol. 49(2), pages 307-335, May.
    5. Adrian Wood, 1995. "How Trade Hurt Unskilled Workers," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 57-80, Summer.
    6. Clarke, George R. G., 1992. "More evidence on income distribution and growth," Policy Research Working Paper Series 1064, The World Bank.
    7. Dornbusch, Rudiger, et al, 1983. "The Black Market for Dollars in Brazil," The Quarterly Journal of Economics, MIT Press, vol. 98(1), pages 25-40, February.
    8. Milanovic, Branko, 1997. "A simple way to calculate the Gini coefficient, and some implications," Economics Letters, Elsevier, vol. 56(1), pages 45-49, September.
    9. Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-55, June.
    10. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
    11. Webb, Michael A. & Berger, Mark C., 1992. "Trade regimes and wages," Journal of Development Economics, Elsevier, vol. 38(1), pages 119-131, January.
    12. Savvides, Andreas, 1998. "Trade policy and income inequality: new evidence," Economics Letters, Elsevier, vol. 61(3), pages 365-372, December.
    13. Paul Krugman & Robert Lawrence, 1993. "Trade, Jobs, and Wages," NBER Working Papers 4478, National Bureau of Economic Research, Inc.
    14. Pozo, Susan & Wheeler, Mark, 1999. "Expectations and the Black Market Premium," Review of International Economics, Wiley Blackwell, vol. 7(2), pages 245-53, May.
    15. Shalit, Haim, 1985. "Calculating the Gini Index of Inequality for Individual Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 47(2), pages 185-89, May.
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    1. Uma crônica argentina, 2001-2012
      by Drunkeynesian in The Drunkeynesian on 2012-06-04 20:34:00

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