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Does Trade and Technology Transmission Facilitate Inequality Convergence? An inquiry Into the Role of Technology in Reducing the Poverty of Nations


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  • Gouranga Gopal Das


Based on stylized evidence showing variation of the Gini coefficient of income inequality across skill cohorts and on the rapid rise in trade in technology-intensive goods, the ripple effects of technology transmission and income inequality are explored in a global Computable General Equilibrium (CGE) framework. An exogenous technology shock transmitted via trade from the United States induces productivity growth in developing regions. This spillover capture-aided by absorptive capability, better governance and institutions, technological symmetry and social acceptance-causes income to increase and income inequality to decline. The conjoined parameters retard growth''s inequality-enhancing effect and thus facilitate long-run convergence of inequality between nations.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 07/16.

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Length: 38
Date of creation: 01 Jan 2007
Date of revision:
Handle: RePEc:imf:imfwpa:07/16

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Keywords: Governance; Risk management; Government expenditures; Emerging markets; economic growth; global trade; trade openness; income distribution; trade liberalization; growth rates; per capita income; unskilled labor; trade flows; growth rate; global trade analysis; bilateral trade; free trade; trade data; intermediate inputs; impact of trade; trade reform; trade reforms; trade model; total factor productivity; real gdp; regional trade; skilled labor; poverty alleviation; import price; export price; endogenous growth theory; global free trade; value of imports; transmission of technology; international trade; trading partners; trade patterns; regional integration; gdp growth; world economy; bilateral trade flows; terms of trade; value of exports; world trade; reducing barriers; intellectual property; open trade; regional liberalization; global trade model; trade policy issues; tariff barriers; mutual trade; trade dependency ratio; national income; export diversion; export prices; multilateral trade; trade partner; neighboring countries; intellectual property rights; protection of intellectual property rights; equilibrium model; global competitiveness; modeling trade policy; tariff liberalization; import prices; imported intermediates; trade-induced growth; multilateral trade liberalization; capital formation; changes in trade; trade partners; freeing trade; endogenous growth; pro-poor growth; political economy; tariff reduction; global competition; trade volumes; imported inputs; import liberalization; multilateralism; impact of trade liberalization; trade creation; imported intermediate; non-tariff barriers; income differences; domestic production; growth cycles; trade liberalization scenarios; domestic investment; increased trade; trade union; rapid economic growth; equilibrium assessments; impact of trade reforms; foreign trade; export growth;

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