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Peripherality, Inequality, and Economic Development in Latin American Countries

Author

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  • Yoshimichi Murakami

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

  • Nobuaki Hamaguchi

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

Abstract

In this study, we analyse new peripheral features of Latin American Countries (LACs), conceptualized by neo-structuralism and the triangular relation between peripherality, inequality, and economic development. We analyse the following as peripheral features: primary commodity dependence, low level of technological progress, poor formation of global value chains (GVCs). On the basis of this triangular relation, we empirically analyse how and to what extent peripherality and inequality affect the income levels in LACs during 1995 to 2014. We find that LACs exhibit a virtuous cycle between a decrease in inequality and an increase in income levels. We also find that although primary commodity dependence, technological progress, and GVC integration directly increase the income levels, they also indirectly decrease the income levels through increasing inequality. Additionally, the increasing effects on inequality is mitigated if a country is integrated into GVCs with higher levels of technological progress.

Suggested Citation

  • Yoshimichi Murakami & Nobuaki Hamaguchi, 2017. "Peripherality, Inequality, and Economic Development in Latin American Countries," Discussion Paper Series DP2017-08, Research Institute for Economics & Business Administration, Kobe University.
  • Handle: RePEc:kob:dpaper:dp2017-08
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    File URL: http://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2017-08.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Primary commodity dependence; Technological progress; Global value chains (GVCs); Neo-structuralism;

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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