Trade Liberalization and Income Equalization: A Long-Run Perspective

Dan Ben-David () and Alok Bohara

No 275610, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

Abstract: An examination of the impact of trade reform on the behavior of income differentials among countries provides the setting for the utilization of an income convergence test that differs from the conventional cross-country regressions. The existence, or non-existence, of convergence involves joint estimation of augmented Dickey-Fuller type equations using seemingly unrelated regression (SUR) techniques. Monte Carlo simulations are used to calculate the critical values which are in turn used to determine the significance of convergence. The findings here provide support for a link between trade liberalization and income convergence.

Keywords: Financial Economics; International Relations/Trade (search for similar items in EconPapers)
Pages: 23
Date: 1995-11
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Working Paper: Trade Liberalization and Income Equalization: A Long-Run Perspective (1995)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:isfiwp:275610

DOI: 10.22004/ag.econ.275610

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