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Is there an openness Kuznets curve? Evidence from Latin America

  • Stephen Dobson
  • Carlyn Ramlogan

Numerous studies have examined the relationship between income inequality and trade openness. This paper departs from previous work by considering a possible non-linear relationship between trade openness and inequality. The evidence is consistent with the idea of a Kuznets curve: inequality increases until a critical level of openness is reached after which inequality begins to fall. The finding of a non-linear relationship between trade openness and inequality implies that governments in Latin America should introduce redistribution policies, alongside trade liberalisation measures, so as to ease the adverse effects of trade liberalisation.

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File URL: http://www.ntu.ac.uk/research/document_uploads/85420.pdf
File Function: First version, 2008
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Paper provided by Nottingham Trent University, Nottingham Business School, Economics Division in its series Working Papers with number 2008/10.

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Date of creation: Jul 2008
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Handle: RePEc:nbs:wpaper:2008/10
Contact details of provider: Web page: http://www.ntu.ac.uk/nbs

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  1. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, World Bank Group, vol. 10(3), pages 565-91, September.
  2. Sanjeev Gupta & Hamid Davoodi & Rosa Alonso-Terme, 2002. "Does corruption affect income inequality and poverty?," Economics of Governance, Springer, vol. 3(1), pages 23-45, 03.
  3. Calderon, Cesar & Chong, Alberto, 2001. "External sector and income inequality in interdependent economies using a dynamic panel data approach," Economics Letters, Elsevier, vol. 71(2), pages 225-231, May.
  4. Dollar, David & Kraay, Aart, 2001. "Growth is good for the poor," Policy Research Working Paper Series 2587, The World Bank.
  5. Shafik, Nemat, 1994. "Economic Development and Environmental Quality: An Econometric Analysis," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 757-73, Supplemen.
  6. Chen, Zhuo, 2007. "Development and inequality: Evidence from an endogenous switching regression without regime separation," Economics Letters, Elsevier, vol. 96(2), pages 269-274, August.
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