IDEAS home Printed from https://ideas.repec.org/p/ags/isfiwp/275610.html

Trade Liberalization and Income Equalization: A Long-Run Perspective

Author

Listed:
  • Ben-David, Dan
  • Bohara, Alok K.

Abstract

An examination of the impact of trade reform on the behavior of income differentials among countries provides the setting for the utilization of an income convergence test that differs from the conventional cross-country regressions. The existence, or non-existence, of convergence 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. The findings here provide support for a link between trade liberalization and income convergence.

Suggested Citation

  • Ben-David, Dan & Bohara, Alok K., 1995. "Trade Liberalization and Income Equalization: A Long-Run Perspective," Foerder Institute for Economic Research Working Papers 275610, Tel-Aviv University > Foerder Institute for Economic Research.
    • Handle: RePEc:ags:isfiwp:275610
    DOI: 10.22004/ag.econ.275610
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/275610/files/TEL-AVIV-FSWP-247.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.275610?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Quah, D., 1990. "Galton'S Fallacy And The Tests Of The Convergence Hypothesis," Working papers 552, Massachusetts Institute of Technology (MIT), Department of Economics.
    2. Abuaf, Niso & Jorion, Philippe, 1990. "Purchasing Power Parity in the Long Run," Journal of Finance, American Finance Association, vol. 45(1), pages 157-174, March.
    3. Robert Summers & Alan Heston, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950–1988," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 327-368.
    4. Friedman, Milton, 1992. "Do Old Fallacies Ever Die?," Journal of Economic Literature, American Economic Association, vol. 30(4), pages 2129-2132, December.
    5. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    6. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-1085, December.
    7. Nelson, Charles R. & Plosser, Charles I., 1982. "Trends and random walks in macroeconmic time series : Some evidence and implications," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 139-162.
    8. repec:bla:scandj:v:95:y:1993:i:4:p:427-43 is not listed on IDEAS
    9. Evans, George W, 1989. "Output and Unemployment Dynamics in the United States: 1950-1985," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(3), pages 213-237, July-Sept.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Evans, Paul, 1996. "Using cross-country variances to evaluate growth theories," Journal of Economic Dynamics and Control, Elsevier, vol. 20(6-7), pages 1027-1049.
    2. de la Fuente, Angel, 1997. "The empirics of growth and convergence: A selective review," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 23-73, January.
    3. Phiri, Andrew, 2018. "Is Swaziland on a path of convergence towards her main trading partners?," MPRA Paper 88790, University Library of Munich, Germany.
    4. Pozzolo, Alberto Franco, 2004. "Endogenous Growth in Open Economies - A Survey of Major Results," Economics & Statistics Discussion Papers esdp04020, University of Molise, Department of Economics.
    5. Rassekh, Farhad & Panik, Michael J. & Kolluri, Bharat R., 2001. "A test of the convergence hypothesis: the OECD experience, 1950-1990," International Review of Economics & Finance, Elsevier, vol. 10(2), pages 147-157.
    6. Julie Le Gallo, 2004. "Space-Time Analysis of GDP Disparities among European Regions: A Markov Chains Approach," International Regional Science Review, , vol. 27(2), pages 138-163, April.
    7. Ozgen Sayginsoy, 2004. "Powerful and Serial Correlation Robust Tests of the Economic Convergence Hypothesis," Discussion Papers 04-07, University at Albany, SUNY, Department of Economics.
    8. Robert Webb & Duncan Watson & Steven Cook, 2021. "Price adjustment in the London housing market," Urban Studies, Urban Studies Journal Limited, vol. 58(1), pages 113-130, January.
    9. Ben-David, Dan, 1996. "Trade and convergence among countries," Journal of International Economics, Elsevier, vol. 40(3-4), pages 279-298, May.
    10. Yin-Wong Cheung & Antonio Garcia Pascual, 2004. "Testing for output convergence: a re-examination," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 45-63, January.
    11. Evans, Paul & Karras, Georgios, 1996. "Convergence revisited," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 249-265, April.
    12. Mushtaq Ahmad Malik & Tariq Masood, 2022. "Dynamics of Output Growth and Convergence in the Middle East and North African Countries: Heterogeneous Panel ARDL Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1444-1469, June.
    13. Sala-i-Martin, Xavier X., 1996. "Regional cohesion: Evidence and theories of regional growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1325-1352, June.
    14. Sakari Lähdemäki, 2017. "Traditional convergence tests with Penn World Table 9.0," Working Papers 309, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    15. Steven N. Durlauf & Andros Kourtellos & Chih Ming Tan, 2008. "Empirics of Growth and Development," Chapters, in: Amitava Krishna Dutt & Jaime Ros (ed.), International Handbook of Development Economics, Volumes 1 & 2, volume 0, chapter 3, Edward Elgar Publishing.
    16. Melanie Krause, 2017. "The Millennium Peak in Club Convergence: A New Look at Distributional Changes in The Wealth of Nations," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 32(3), pages 621-642, April.
    17. Alan M. Taylor, 1996. "On the Costs of Inward-Looking Development: Historical Perspectives on Price Distortions, Growth, and Divergence in Latin American from 1930s - 1980s," NBER Working Papers 5432, National Bureau of Economic Research, Inc.
    18. Paul Johnson & Chris Papageorgiou, 2020. "What Remains of Cross-Country Convergence?," Journal of Economic Literature, American Economic Association, vol. 58(1), pages 129-175, March.
    19. Burcu Ozcan, 2014. "Does Income Converge among EU Member Countries following the Post-War Period? Evidence from the PANKPSS Test," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 22-38, October.
    20. Fung, Michael K. & Cheng, Arnold C.S., 2010. "Convergence of total factor productivity among banks: Hong Kong's experience," Global Finance Journal, Elsevier, vol. 21(2), pages 201-210.

    More about this item

    Keywords

    ;
    ;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:isfiwp:275610. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/fotauil.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.