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Income Distribution, Factor Endowments, and Trade Revisited: The Role of Non-Tradable Goods

Author

Listed:
  • Sebastian Galiani

    (University of Maryland)

  • Daniel Heymann

    (Instituto Interdisciplinario de Economía Política de Buenos Aires - UBA - CONICET)

  • Nicolas Magud

    (International Monetary Fund)

Abstract

We revisit the theme of the distributive implications of international prices and trade policies, focusing on economies relatively abundant in natural resources. The existence of non-traded goods adds a domestic demand channel that operates on factor prices, in addition to the usual Stolper-Samuelson effects. Depending on the configuration of the economy, we find diverse patterns in the response of factor earnings to international and policy shifts. The analysis relates to a number of long-standing concerns in developing economies, especially those of Latin America, and to the recent literature that has brought the role of international trade in shaping domestic social cleavages and policy tradeoffs back to the fore.

Suggested Citation

  • Sebastian Galiani & Daniel Heymann & Nicolas Magud, 2016. "Income Distribution, Factor Endowments, and Trade Revisited: The Role of Non-Tradable Goods," Documentos de trabajo del Instituto Interdisciplinario de Economía Política IIEP (UBA-CONICET) 2016-14, Universidad de Buenos Aires, Facultad de Ciencias Económicas, Instituto Interdisciplinario de Economía Política IIEP (UBA-CONICET).
    • Handle: RePEc:ake:iiepdt:201614
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    References listed on IDEAS

    as
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    2. Gasparini, Leonardo & Galiani, Sebastian & Cruces, Guillermo & Acosta, Pablo A., 2011. "Educational Upgrading and Returns to Skills in Latin America: Evidence from a Supply-Demand Framework, 1990-2010," IZA Discussion Papers 6244, IZA Network @ LISER.

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    Keywords

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    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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