Trade Effects on the Personal Distribution of Wealth
This paper develops a dynamic Heckscher-Ohlin model and studies the interaction between international trade and wealth distribution dynamics. I also study how differences in the cost of financial intermediation among countries may affect the pattern of trade and wealth dynamics. Relative to the inequality it would have prevailed under autarky, I find that trade promotes a decline (an increase) in inequality when the economy converges to the steady state form below (above). However, with trade inequality increases (declines) during the transition from below (above). I also find that trade may alleviate frictions in the financial intermediation sector in economies where these frictions are larger. In those economies, trade may in fact promote a higher income than under autarky.
|Date of creation:||Oct 2002|
|Contact details of provider:|| Postal: Camino a Sta. Teresa 930, Mexico, D.F. 10700|
Phone: +525 628 4197
Fax: +525 628 4058
Web page: http://cie.itam.mx/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wood, Adrian, 1997. "Openness and Wage Inequality in Developing Countries: The Latin American Challenge to East Asian Conventional Wisdom," World Bank Economic Review, World Bank Group, vol. 11(1), pages 33-57, January.
- Daron Acemoglu & Jaume Ventura, 2001.
"The World Income Distribution,"
NBER Working Papers
8083, National Bureau of Economic Research, Inc.
- Joseph E. Stiglitz, 1967.
"Distribution of Income and Wealth Among Individuals,"
Cowles Foundation Discussion Papers
238, Cowles Foundation for Research in Economics, Yale University.
- Stiglitz, Joseph E, 1969. "Distribution of Income and Wealth among Individuals," Econometrica, Econometric Society, vol. 37(3), pages 382-397, July.
- Caselli, F. & Ventura, J., 1996.
"A Representative Consumer Theory of Distribution,"
96-11, Massachusetts Institute of Technology (MIT), Department of Economics.
- King, Robert G & Rebelo, Sergio T, 1993.
"Transitional Dynamics and Economic Growth in the Neoclassical Model,"
American Economic Review,
American Economic Association, vol. 83(4), pages 908-931, September.
- King, R.G. & Rebelo, S.T., 1989. "Transitional Dynamics And Economic Growth In The Neoclassical Model," RCER Working Papers 206, University of Rochester - Center for Economic Research (RCER).
- Robert G. King & Sergio T. Rebelo, 1989. "Transitional Dynamics and Economic Growth in the Neoclassical Model," NBER Working Papers 3185, National Bureau of Economic Research, Inc.
- Robertson, Raymond, 2004. "Relative prices and wage inequality: evidence from Mexico," Journal of International Economics, Elsevier, vol. 64(2), pages 387-409, December.
- Ronald D. Fischer & Pablo Serra, 1996. "Income Inequality and Choice of Free Trade in a Model of Intraindustry Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 41-64.
- Andrew Atkeson & Patrick J. Kehoe, 2000. "Paths of development for early- and late-bloomers in a dynamic Heckscher-Ohlin model," Staff Report 256, Federal Reserve Bank of Minneapolis.
- Albert Marcet & Ramon Marimon, 1992.
"Communication, commitment, and growth,"
Discussion Paper / Institute for Empirical Macroeconomics
74, Federal Reserve Bank of Minneapolis.
- Shang-Jin Wei & Yi Wu, 2001.
"Globalization and Inequality: Evidence from Within China,"
NBER Working Papers
8611, National Bureau of Economic Research, Inc.
- Wei, Shang-Jin & Wu, Yi, 2001. "Globalization and Inequality: Evidence from within China," CEPR Discussion Papers 3088, C.E.P.R. Discussion Papers.
- Gerhard Sorger, 2000. "Income and wealth distribution in a simple model of growth," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 16(1), pages 23-42.
- Bruce D. Smith, 2003. "Taking intermediation seriously," Proceedings, Federal Reserve Bank of Cleveland, pages 1319-1377.
When requesting a correction, please mention this item's handle: RePEc:cie:wpaper:0208. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Diego Dominguez)
If references are entirely missing, you can add them using this form.