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This letter uses an augmented gravity model to revisit the effect of similarity in income distributions on bilateral trade flows. We document a robust new empirical regularity: while differences in average incomes between two countries increase trade, differences in income dispersion reduce it....
Persistent link: https://www.econbiz.de/10011189532
hypothesis and strengthens the role of non-homothetic preferencesin trade theory. …
Persistent link: https://www.econbiz.de/10010877601
Persistent link: https://www.econbiz.de/10008591041
This paper examines the trading pattern of Bay of Bengal Initiative for Multi- Sectoral Technical and Economic Cooperation (BIMSTEC) by employing an augmented gravity model. The econometric specification followed Egger (2000, 2002), Baltagi et al. (2003) and Serlenga and Shin (2007). Diagnostic...
Persistent link: https://www.econbiz.de/10009421176
The Linder hypothesis states that countries will trade more intensively with countries that have similar structures of demand. We suggest an alternative method of assessing the hypothesis, incorporating the distribution of income within a country. The variables that we develop capture the...
Persistent link: https://www.econbiz.de/10005644914
We examine the relationship between trade and financial globalization and the rise in inequality in most countries in recent decades. We find technological progress as having a greater impact than globalization on inequality. The limited overall impact of globalization reflects two offsetting...
Persistent link: https://www.econbiz.de/10005263792
Can growth of a trading partner harm a country? This paper seeks to answer this question through the use of an eclectic trade model which is similar in flavour to Markusen (1986). This paper makes two contributions. First, it develops a simple and tractable model of international trade based on...
Persistent link: https://www.econbiz.de/10009391438
Can growth of a trading partner harm a country? This paper seeks to answer this question through the use of an eclectic trade model which is similar in flavour to Markusen (1986). This paper makes two contributions. First, it develops a simple and tractable model of international trade based on...
Persistent link: https://www.econbiz.de/10011195973
This paper analyzes the relationship between international and domestic food prices in a stylized economic model. The model is based on the empirically sound principle of quality substitution and a dichotomy between traded and domestic goods. Households are equipped with preferences which make...
Persistent link: https://www.econbiz.de/10011124941
A key parameter determining the welfare impact from a world market shock is the transmission elasticity which measures … a model which explains a country's domestic price response to world market shocks in terms of its demand structure. The … fact that the majority of the world's poor today live in middle-income countries. …
Persistent link: https://www.econbiz.de/10011114875