Inequality, status effects and trade

Sugata Marjit and Punarjit Roychowdhury

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we attempt to examine the role of social inequality and status effects in driving trade between two countries which differ systematically only in terms of income-distribution using a status-driven model of consumption involving a status and a non-status good. Our model illustrates that when trade opens up, the country characterized by a higher level of inequality is likely to export the non-status good to the country characterized by a lower level of inequality, thus, establishing the extent of inequality as a determining factor behind comparative advantage.

Keywords: Inequality; Status effects; Trade (search for similar items in EconPapers)
JEL-codes: D01 D31 F11 (search for similar items in EconPapers)
Date: 2012-07-22
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:40225

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