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International Trade and Income Distribution

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  • Yang, X.
  • Zhang, D.

Abstract

This paper applies the inframarginal analysis, which is a combination of marginal and total cost-benefit analysis, to investigate the relationship between division of labor, the extent of the market, productivity, and inequality of income distribution. The model with transaction costs and exogenous and endogenous comparative advantages shows that as transaction conditions are improved, the general equilibrium discontinuously jumps from autarky to partial division of labor with a dual structure, then to the complete division of labor where dual structure disappears. In this process different groups of individuals with different transaction conditions get involved in a certain level of division of labor at different stages of development.

Suggested Citation

  • Yang, X. & Zhang, D., 2000. "International Trade and Income Distribution," Papers 18, Chicago - Graduate School of Business.
    • Handle: RePEc:fth:chicbu:18
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    Cited by:

    1. Yanqing Jiang, 2016. "Trade integration and regional inequality: a theoretical framework with empirical implications for China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 14(4), pages 365-384, October.
    2. Cheng, Wenli & Yang, Xiaokai, 2004. "Inframarginal analysis of division of labor: A survey," Journal of Economic Behavior & Organization, Elsevier, vol. 55(2), pages 137-174, October.

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    More about this item

    Keywords

    INCOME DISTRIBUTION ; ECONOMIC DEVELOPMENT;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • F10 - International Economics - - Trade - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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