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Trade Uncertainty and Income Inequality

Author

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  • Markus Brueckner
  • Joaquin L. Vespignani

Abstract

This paper examines the relationship between trade uncertainty and income inequality. In countries where only a small share of the population is educated, an increase in trade uncertainty is associated with a significant increase in income inequality. As education of the population increases the relationship between trade uncertainty and income inequality becomes more muted. Trade uncertainty has no significant effect on income inequality in countries that are world leaders in education. Developing countries that want to reduce income inequality arising from trade uncertainty should therefore consider further improving their education system.

Suggested Citation

  • Markus Brueckner & Joaquin L. Vespignani, 2017. "Trade Uncertainty and Income Inequality," Globalization Institute Working Papers 306, Federal Reserve Bank of Dallas.
  • Handle: RePEc:fip:feddgw:306
    DOI: 10.24149/gwp306
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    References listed on IDEAS

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    7. Kyle Jurado & Sydney C. Ludvigson & Serena Ng, 2015. "Measuring Uncertainty," American Economic Review, American Economic Association, vol. 105(3), pages 1177-1216, March.
    8. Head, Keith & Mayer, Thierry & Ries, John, 2010. "The erosion of colonial trade linkages after independence," Journal of International Economics, Elsevier, vol. 81(1), pages 1-14, May.
    9. Ethan Ilzetzki & Carmen M Reinhart & Kenneth S Rogoff, 2019. "Exchange Arrangements Entering the Twenty-First Century: Which Anchor will Hold?," The Quarterly Journal of Economics, Oxford University Press, vol. 134(2), pages 599-646.
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    Cited by:

    1. Tian, Jilin & Sim, Nicholas & Yan, Wenshou & Li, Yanyun, 2020. "Trade uncertainty, income, and democracy," Economic Modelling, Elsevier, vol. 90(C), pages 21-31.

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    More about this item

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • F1 - International Economics - - Trade

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