The Inequality Adjusted Gains From Trade

Author : Erhan Artuc
Publisher : Springer Nature
ISBN 13 : 3030930602
Total Pages : 158 pages
Book Rating : 4.08/5 ( download)

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Download or read book The Inequality Adjusted Gains from Trade written by Erhan Artuc and published by Springer Nature. This book was released on 2022-02-09 with total page 158 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume examines the relationship between trade liberalization policies and income inequality in developing countries. Using survey data for 54 developing countries, the book explores the potential trade-off between the gains from trade and the distribution of those gains and provides a quantification of the inequality-adjusted welfare gains from trade. The book begins with an introduction to the model and its methodology. Chapter 2 sets up the model and derives the formulas for the welfare effects of trade policy. Chapter 3 uses the tariff data and the survey data to estimate those welfare effects in 54 countries. Chapter 4 discusses the gains from trade and their distribution. Chapter 5 evaluates and quantifies the trade-off between income gains and inequality costs of trade. Chapter 6 presents robustness tests and results from alternative models of the impacts of trade. The last chapter reviews the Household Impacts of Trade database and dashboard, which provides data for replication and a platform that allows researchers to simulate agricultural tariff policy shocks. Providing a comprehensive empirical analysis of the effects of trade policy on inequality in developing countries, this volume will be of interest to researchers and students of economic inequality, development, and international trade as well as policymakers interested in the inequality and poverty consequences of trade policy.

Author : Pinelopi K. Goldberg
Publisher : Edward Elgar Publishing
ISBN 13 : 9781783479474
Total Pages : 0 pages
Book Rating : 4.77/5 ( download)

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Download or read book Trade and Inequality written by Pinelopi K. Goldberg and published by Edward Elgar Publishing. This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This research review brings together the most influential theoretical and empirical contributions to the topic of trade and inequality from recent years. Segregating the subject into four key areas, it forms a comprehensive study of the subject, targeted at academic readers familiar with the main trade models and empirical methods used in economics. The first two parts cover empirical evidence on trade and inequality in developed and developing countries, while the third and fourth sections confront transition dynamics following trade liberalization and new theoretical contributions inspired by the previously-discussed empirical evidence, respectively. Presented with an extensive original introduction by the editor, Trade and Inequality will be an invaluable tool in the study of this field to advanced undergraduate students, graduate students and faculty alike.

Author : Robert Z Lawrence
Publisher : Columbia University Press
ISBN 13 : 088132485X
Total Pages : 105 pages
Book Rating : 4.53/5 ( download)

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Download or read book Blue Collar Blues written by Robert Z Lawrence and published by Columbia University Press. This book was released on 2008-01-01 with total page 105 pages. Available in PDF, EPUB and Kindle. Book excerpt: International trade accounts for only a small share of growing income inequality and labor-market displacement in the United States. Lawrence deconstructs the gap in real blue-collar wages and labor productivity growth between 1981 and 2006 and estimates how much higher these wages might have been had income growth been distributed proportionately and how much of the gap is due to measurement and technical factors about which little can be done. While increased trade with developing countries may have played some part in causing greater inequality in the 1980s, surprisingly, over the past decade the impact of such trade on inequality has been relatively small. Many imports are no longer produced in the United States, and US goods and services that do compete with imports are not particularly intensive in unskilled labor. Rising income inequality and slow real wage growth since 2000 reflect strong profit growth, much of which may be cyclical, and dramatic income gains for the top 1 percent of wage earners, a development that is more closely related to asset-market performance and technological and institutional innovations rather than conventional trade in goods and services. The minor role of trade, therefore, suggests that any policy that focuses narrowly on trade to deal with wage inequality and job loss is likely to be ineffective. Instead, policymakers should (a) use the tax system to improve income distribution and (b) implement adjustment policies to deal more generally with worker and community dislocation.

Author : Davide Furceri
Publisher : International Monetary Fund
ISBN 13 : 1513531409
Total Pages : 26 pages
Book Rating : 4.03/5 ( download)

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Download or read book Capital Account Liberalization and Inequality written by Davide Furceri and published by International Monetary Fund. This book was released on 2015-11-24 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the distributional impact of capital account liberalization. Using panel data for 149 countries from 1970 to 2010, we find that, on average, capital account liberalization reforms increase inequality and reduce the labor share of income in the short and medium term. We also find that the level of financial development and the occurrence of crises play a key role in shaping the response of inequality to capital account liberalization reforms.

Author : Simon Galle
Publisher :
ISBN 13 :
Total Pages : 124 pages
Book Rating : 4.16/5 ( download)

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Download or read book Essays in Development and Trade written by Simon Galle and published by . This book was released on 2016 with total page 124 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation in development and trade explores the economic impact of liberalization and globalization. In the past few decades, as emerging economies such as India and China have opened up to world trade and liberalized their economies, these countries have experienced a surprisingly fast increase in GDP per capita. This is testament to the large benefits that can be reaped from globalization and liberalization. Paradoxically however, while globalization and liberalization should be celebrating their success stories, they are met by ever fiercer criticism, as is clear from rising opposition against free trade and an increasing resentment against globalization on both sides of the Atlantic, of which the recent Brexit referendum is but one example. These developments call for a more nuanced understanding of the benefits, but also of the downsides of globalization and liberalization, and this dissertation attempts to contribute to this understanding. The first chapter of this dissertation develops a novel general-equilibrium model of the relationship between competition, financial constraints and misallocation. In the model, steady-state misallocation consists of both variable markups and capital wedges. The variable markups arise from Cournot-type competition, whereas the capital wedges result from the interaction of firm-level productivity volatility with financial constraints. Firms experience random shocks to their productivity and in response to positive productivity shocks they optimally grow their capital stock, subject to financial constraints. Competition plays a dual role in affecting misallocation. On the one hand, both markup levels and markup dispersion tend to fall with competition, which unambiguously improves allocative efficiency in a setting without financial constraints. On the other hand, in a setting with financial constraints, a reduction in markups is associated with slower capital accumulation, as the rate of self-financed investment shrinks. Thus, the positive impact of competition on steady-state misallocation is reduced by the presence of financial constraints. The second chapter then tests the implications of the theoretical model from the first chapter using Indian plant-level panel data. The prediction that the firm-level speed of capital convergence falls with competition is confirmed for the full panel of manufacturing plants in India's Annual Survey of Industries. This effect is particularly pronounced in sectors with higher levels of financial dependence. I also exploit natural variation in the level of competition, arising from the pro-competitive impact of India's 1997 dereservation reform on incumbent plants, and again confirm the qualitative predictions of the model. The third chapter, which is joint work with Andr'es Rodr'iguez-Clare and Moises Yi, develops and applies a framework to analyze the effect of trade on aggregate welfare as well as the distribution of this aggregate effect across different groups of workers. The framework combines a multi-sector gravity model of trade with a Roy-type model of the allocation of workers across sectors. The model predicts unequal distribution of the gains from trade as labor demand increases (decreases) for groups of workers specialized in export-oriented (import-oriented) sectors. The model generalizes the specific-factors intuition to a setting with labor reallocation, while maintaining analytical tractability for any number of groups and countries. We bring the model to the data using China's growth as a trade shock, where we define groups as German regions. First, we show that the model's structure accurately captures the empirical changes in regional income due to the China shock. Second, we structurally estimate the model's parameter that governs the distributional effects of the model. Counterfactual simulations show that this parameter implies sizable distributional implications of trade, with several groups losing from free trade. Finally, we measure the "inequality-adjusted" welfare effect of trade, which captures the full cross-group distribution of welfare changes in one measure. We find that inequality-adjusted gains from trade are larger than the aggregate gains for both countries, as between-group inequality falls with trade relative to autarky. Importantly, the opposite happens for the China shock.

Author : Moises Yi
Publisher :
ISBN 13 :
Total Pages : 128 pages
Book Rating : 4.55/5 ( download)

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Download or read book Essays in Labor Economics and International Trade written by Moises Yi and published by . This book was released on 2016 with total page 128 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation employs tools from Labor Economics and International Trade to study how workers and labor markets adjust to economic shocks arising from trade liberalization and technological change. It contributes to the existing literature by studying several economic mechanisms that determine the magnitudes of these adjustments. The first chapter of this dissertation analyzes the roles that skill transferability and the local industry mix have on the adjustment costs of workers affected by negative trade shocks. Using rich administrative data from Germany, we construct novel measures of economic distance between sectors based on the notion of skill transferability. We combine these distance measures with sectoral employment shares in German regions to construct an index of labor market flexibility. This index captures the degree to which workers from a particular industry will be able to reallocate into other jobs. We then study the role of labor market flexibility on the effect of import shocks on the earnings and the employment outcomes of German manufacturing workers. Among workers living in inflexible labor markets, the difference between a worker at the 75th percentile of industry import exposure and one at the 25th percentile of exposure amounts to an earnings loss of roughly 11% of initial annual income (over a 10 year period). The earning losses of workers living in flexible regions are negligible. These findings are robust to controlling for a wide array of region level characteristics, including region size and overall employment growth. Our findings indicate that the industry composition of local labor markets plays an important role on the adjustment processes of workers. In the second chapter, we develop and apply a framework to quantify the effect of trade on aggregate welfare as well as the distribution of this aggregate effect across different groups of workers. The framework combines a multi-sector gravity model of trade with a Roy-type model of the allocation of workers across sectors. By opening to trade, a country gains in the aggregate by specializing according to its comparative advantage, but the distribution of these gains is unequal as labor demand increases (decreases) for groups of workers specialized in export-oriented (import-oriented) sectors. The model generalizes the specific-factors intuition to a setting with labor reallocation, while maintaining analytical tractability for any number of groups and countries. Our new notion of "inequality-adjusted" welfare effect of trade captures the full cross-group distribution of welfare changes in one measure, as the counterfactual scenario is evaluated by a risk-averse agent behind the veil of ignorance regarding the group to which she belongs. The quantitative application uses trade and labor allocation data across regions in Germany to compute the aggregate and distributional effects of a shock to trade costs or foreign technology levels. For the extreme case in which the country moves back to autarky we find that inequality-adjusted gains from trade are larger than the aggregate gains for both countries, as between-group inequality falls with trade relative to autarky, but the opposite happens for the shock in which China expands in the world economy. In the third chapter, we use detailed production data from a large Latin American garment manufacturer to study the process of technology adoption and resulting productivity changes within a firm. We find that the adoption of modern manufacturing techniques increases productivity through two channels, a direct effect and a spillover effect across adjacent production units. By exploiting the gradual introduction of new manufacturing techniques across independent production units, we estimate a direct effect on productivity of roughly 30%. We also estimate large spillovers to neighboring untreated units which amount to a 25% increase in productivity. Both of these effects accumulate slowly over time. The timing and the magnitudes of the estimated spillover effects corroborate qualitative evidence consistent with knowledge diffusion, learning and imitation.

Author : Edward Alden
Publisher : Rowman & Littlefield
ISBN 13 : 1538109093
Total Pages : 268 pages
Book Rating : 4.90/5 ( download)

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Download or read book Failure to Adjust written by Edward Alden and published by Rowman & Littlefield. This book was released on 2017-09-15 with total page 268 pages. Available in PDF, EPUB and Kindle. Book excerpt: *Updated edition with a new foreword on the Trump administration's trade policy* The vast benefits promised by the supporters of globalization, and by their own government, have never materialized for many Americans. In Failure to Adjust Edward Alden provides a compelling history of the last four decades of US economic and trade policies that have left too many Americans unable to adapt to or compete in the current global marketplace. He tells the story of what went wrong and how to correct the course. Originally published on the eve of the 2016 presidential election, Alden’s book captured the zeitgeist that would propel Donald J. Trump to the presidency. In a new introduction to the paperback edition, Alden addresses the economic challenges now facing the Trump administration, and warns that economic disruption will continue to be among the most pressing issues facing the United States. If the failure to adjust continues, Alden predicts, the political disruptions of the future will be larger still.

Author : Abhijit V. Banerjee
Publisher : PublicAffairs
ISBN 13 : 1541762878
Total Pages : 398 pages
Book Rating : 4.79/5 ( download)

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Download or read book Good Economics for Hard Times written by Abhijit V. Banerjee and published by PublicAffairs. This book was released on 2019-11-12 with total page 398 pages. Available in PDF, EPUB and Kindle. Book excerpt: The winners of the Nobel Prize show how economics, when done right, can help us solve the thorniest social and political problems of our day. Figuring out how to deal with today's critical economic problems is perhaps the great challenge of our time. Much greater than space travel or perhaps even the next revolutionary medical breakthrough, what is at stake is the whole idea of the good life as we have known it. Immigration and inequality, globalization and technological disruption, slowing growth and accelerating climate change--these are sources of great anxiety across the world, from New Delhi and Dakar to Paris and Washington, DC. The resources to address these challenges are there--what we lack are ideas that will help us jump the wall of disagreement and distrust that divides us. If we succeed, history will remember our era with gratitude; if we fail, the potential losses are incalculable. In this revolutionary book, renowned MIT economists Abhijit V. Banerjee and Esther Duflo take on this challenge, building on cutting-edge research in economics explained with lucidity and grace. Original, provocative, and urgent, Good Economics for Hard Times makes a persuasive case for an intelligent interventionism and a society built on compassion and respect. It is an extraordinary achievement, one that shines a light to help us appreciate and understand our precariously balanced world.

Author : Matthew C. Klein
Publisher : Yale University Press
ISBN 13 : 0300244177
Total Pages : 292 pages
Book Rating : 4.75/5 ( download)

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Download or read book Trade Wars are Class Wars written by Matthew C. Klein and published by Yale University Press. This book was released on 2020-01-01 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt: "This is a very important book."--Martin Wolf, Financial TimesA provocative look at how today's trade conflicts are caused by governments promoting the interests of elites at the expense of workers Longlisted for the 2020 Financial Times & McKinsey Business Book of the Year Award "Worth reading for [the authors'] insights into the history of trade and finance."--George Melloan, Wall Street Journal Trade disputes are usually understood as conflicts between countries with competing national interests, but as Matthew C. Klein and Michael Pettis show, they are often the unexpected result of domestic political choices to serve the interests of the rich at the expense of workers and ordinary retirees. Klein and Pettis trace the origins of today's trade wars to decisions made by politicians and business leaders in China, Europe, and the United States over the past thirty years. Across the world, the rich have prospered while workers can no longer afford to buy what they produce, have lost their jobs, or have been forced into higher levels of debt. In this thought-provoking challenge to mainstream views, the authors provide a cohesive narrative that shows how the class wars of rising inequality are a threat to the global economy and international peace--and what we can do about it.

Author : William R. Cline
Publisher : Peterson Institute
ISBN 13 : 9780881322163
Total Pages : 330 pages
Book Rating : 4.64/5 ( download)

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Download or read book Trade and Income Distribution written by William R. Cline and published by Peterson Institute. This book was released on 1997 with total page 330 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Cline also finds that trade liberalization has tended to raise skilled wages rather than reduce unskilled wages. Moreover, its impact has probably been no larger than falling transport and communication costs. Most importantly for policy, model simulations for the future show more limited trade impact than in the past and little unequalizing impact of further trade liberalization. Book jacket."--Jacket.