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International Trade and Per Capita Income Convergence: A Difference-in-Differences Analysis

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  • Matthew J. Slaughter

Abstract

In this paper I analyze whether international trade contributes to per capita income convergence across countries. The analysis focuses on four important post-1945 multilateral trade liberalizations. To identify trade's effect on income dispersion, in each case I use a difference-in-differences' approach which compares the convergence pattern among the liberalizing countries before and after liberalization with the convergence pattern among randomly chosen control countries before and after liberalization. My main empirical result is that trade liberalization did not trigger convergence in any of the four cases. If anything, trade seems to have caused income divergence.

Suggested Citation

  • Matthew J. Slaughter, 1998. "International Trade and Per Capita Income Convergence: A Difference-in-Differences Analysis," NBER Working Papers 6557, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:6557
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    Cited by:

    1. Singh, Ajit & Zammit, Ann, 2000. "International Capital Flows: Identifying the Gender Dimension," World Development, Elsevier, vol. 28(7), pages 1249-1268, July.
    2. Dong-Hyeon Kim & Shu-Chin Lin, 2012. "Trade and income at different stages of economic development," Applied Economics, Taylor & Francis Journals, vol. 44(4), pages 409-421, February.
    3. Nasfi Fkili Wahiba, 2015. "Convergence and Divergence among Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(3), pages 510-520, March.
    4. Singh, Ajit, 1999. "Global economic trends, development and social policy at Copenhagen plus five," MPRA Paper 53557, University Library of Munich, Germany.
    5. David EA Giles, 2005. "Output Convergence and International Trade: Time-Series and Fuzzy Clustering Evidence for New Zealand and her Trading Partners, 1950 - 1992," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 14(1), pages 93-114.
    6. Andrew B. Bernard & J. Bradford Jensen, 1999. "Exporting and Productivity," NBER Working Papers 7135, National Bureau of Economic Research, Inc.
    7. Singh, Ajit, 1999. "The role of employment and work in poverty eradication and empowerment and advancement of women," MPRA Paper 53561, University Library of Munich, Germany.
    8. Alessia Lo Turco, 2005. "South-South Trade Agreements, Location of Production and Inequality in Latin America," Ibero America Institute for Econ. Research (IAI) Discussion Papers 127, Ibero-America Institute for Economic Research.

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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