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Does wealth inequality reduce the gains from trade?

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  • Mauro Caselli

Abstract

Panel data on 54 developing countries between 1960 and 2000 are used to investigate how the impact of opening to trade on economic growth is affected by wealth inequality. The results suggest (a) that opening to trade tends to accelerate growth but (b) that the addition to growth depends inversely on the level of wealth inequality prior to opening. These findings confirm the general importance for rapid growth in developing countries of reducing inequalities of opportunity.

Suggested Citation

  • Mauro Caselli, 2008. "Does wealth inequality reduce the gains from trade?," CSAE Working Paper Series 2008-30, Centre for the Study of African Economies, University of Oxford.
  • Handle: RePEc:csa:wpaper:2008-30
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    Cited by:

    1. Foellmi, Reto & Legge, Stefan & Tiemann, Alexa, 2015. "Innovation and Trade in the Presence of Credit Constraints," CEPR Discussion Papers 10391, C.E.P.R. Discussion Papers.
    2. Caselli, Mauro, 2013. "Credit constraints, inequality and the growth gains from trade," Economics Letters, Elsevier, vol. 121(1), pages 43-47.

    More about this item

    Keywords

    growth; inequality; openness; trade; developing countries;

    JEL classification:

    • F1 - International Economics - - Trade
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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