Equalizing Exchange: A Study of the Effects of Trade Liberalization
It has been quite broadly documented that, historically, there has not been widespread convergence in levels of income across countries. This paper addresses the question of whether the behavior of cross-country income differentials over time, within a specified group of countries, might be affected by the removal of trade barriers. The analysis focuses on the evolutionary period of the European Economic Community, which is characterized by a specific timetable for the removal of trade barriers. This liberalization is shown to be strongly related to a significant income convergence that took place between the members of the Community. The evidence indicates that, until their trade became more liberalized, the income differentials between the countries of the EEC behaved very much like the income differentials between the industrialized countries today. After the onset of freer trade, the EEC countries achieved a reduction in income disparity that exhibited a marked similarity to the income convergence that occurred between the states of the U.S. This came about despite the fact that inter-state migration is considerably more widespread and unrestricted than are labor movements within the European Community.
|Date of creation:||May 1991|
|Date of revision:|
|Publication status:||published as The Quarterly Journal of Economics, vol. cviii, issue 3, August 1993, (MIT Press, Cambridge), p. 653|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
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.:
- Barro, R.J., 1989.
"Economic Growth In A Cross Section Of Countries,"
RCER Working Papers
201, University of Rochester - Center for Economic Research (RCER).
- Tjalling C. Koopmans, 1963. "On the Concept of Optimal Economic Growth," Cowles Foundation Discussion Papers 163, Cowles Foundation for Research in Economics, Yale University.
- De Long, J Bradford, 1988.
"Productivity Growth, Convergence, and Welfare: Comment,"
American Economic Review,
American Economic Association, vol. 78(5), pages 1138-54, December.
- J. Bradford De Long, . "Productivity Growth, Convergence, and Welfare: Comment," J. Bradford De Long's Working Papers _129, University of California at Berkeley, Economics Department.
- Andrew B. Bernard & Steven N. Durlauf, 1991. "Convergence of International Output Movements," NBER Working Papers 3717, National Bureau of Economic Research, Inc.
- Luis A. Rivera-Batiz & Paul M. Romer, 1991.
"International Trade with Endogenous Technological Change,"
NBER Working Papers
3594, National Bureau of Economic Research, Inc.
- Rivera-Batiz, Luis A. & Romer, Paul M., 1991. "International trade with endogenous technological change," European Economic Review, Elsevier, vol. 35(4), pages 971-1001, May.
- Jovanovic, Boyan & Lach, Saul, 1990.
"The Diffusion Of Technology And Inequality Among Nations,"
90-34, C.V. Starr Center for Applied Economics, New York University.
- Boyan Jovanovic & Saul Lach, 1991. "The Diffusion of Technology and Inequality Among Nations," NBER Working Papers 3732, National Bureau of Economic Research, Inc.
- Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-85, December.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Samuelson, Paul A., 1975. "Trade pattern reversals in time-phased Ricardian systems and intertemporal efficiency," Journal of International Economics, Elsevier, vol. 5(4), pages 309-363, November.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
- Michaely, Michael, 1977. "Exports and growth : An empirical investigation," Journal of Development Economics, Elsevier, vol. 4(1), pages 49-53, February.
- Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
- Quah, D., 1990. "Galton'S Fallacy And The Tests Of The Convergence Hypothesis," Working papers 552, Massachusetts Institute of Technology (MIT), Department of Economics.
- L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:3706. 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: ()
If references are entirely missing, you can add them using this form.