Spatial Dependence of Income Inequality among Trading Partners

Fadi A. Fawaz

Middle East Development Journal, 2011, vol. 3, issue 2, 215-232

Abstract: Questions surrounding income inequality have received great attention in the recent economic literature. Traditionally the literature does not attempt to investigate how income inequality in a country could be affected by the income inequality of countries economically related to it. Using Trade Spatial Lags, this paper shows that a country’s income inequality is affected by the inequality of its top trading partners. This investigation shows a strong positive relationship of the Gini coefficient among major trading partners. To conduct the study, we use panel data for a sample of 180 countries from 1960 to 2008.

Date: 2011
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DOI: 10.1142/S1793812011000375

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