Non-gravity trade
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Brueckner, Markus
Long, N. V.
Vespignani, Joaquin
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Crawford School of Public Policy, The Australian National University
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Open Access
Abstract
This paper examines the relationship between countries' bilateral trade with the United States that is not due to gravity (non-gravity trade) and the distribution of income within countries. In countries where only a small share of the population are educated, an increase in non-gravity trade is associated with a significant increase in income inequality. As education of the population increases the correlation between non-gravity trade and income inequality becomes smaller. Non-gravity trade has no significant effect on income inequality in countries that are world leaders in education.
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Centre for Applied Macroeconomic Analysis Working Papers
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Publication
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Open Access
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