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International Trade's Impact on Poverty


  • Vasil Gechev

    () (University of National and World Economy, Sofia, Bulgaria)


International trade is one of the fastest developing sectors of the world economy, with total merchandise trade growing from $7.1 trillion in 1990 to $30.8 trillion in 2010. For the same period, the number of people living in extreme poverty (with under $1.25/day) worldwide has declined with nearly 800 million. This simultaneous growth of trade volumes and reduction of extreme poverty at macro level is the starting point of the analysis. Since a classical (mono-dimensional) ‘cause-effect’ relationship between trade and poverty cannot be identified, international trade’s impact on poverty has been examined through the static and dynamic effects of trade. The analysis features a broad empirical research, covering the regions with the highest concentration of extreme poverty – Africa, Asia and Latin America. The paper’s main thesis is that the long-term positive impact on poverty depends largely on the dynamic effects of trade.

Suggested Citation

  • Vasil Gechev, 2016. "International Trade's Impact on Poverty," Nauchni trudove, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 122-169, December.
  • Handle: RePEc:nwe:natrud:y:2016:i:2:p:122-169

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    More about this item


    international trade; poverty; developing countries; economic development.;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F19 - International Economics - - Trade - - - Other
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty


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