Income Distribution, Factor Endowments, and Trade Revisited: The Role of Non-Tradable Goods

Sebastian Galiani, Daniel Heymann and Nicolas Magud

No 2016-14, Documentos de trabajo del Instituto Interdisciplinario de Economía Política IIEP (UBA-CONICET) from Universidad de Buenos Aires, Facultad de Ciencias Económicas, Instituto Interdisciplinario de Economía Política IIEP (UBA-CONICET)

Abstract: We revisit the theme of the distributive implications of international prices and trade policies, focusing on economies relatively abundant in natural resources. The existence of non-traded goods adds a domestic demand channel that operates on factor prices, in addition to the usual Stolper-Samuelson effects. Depending on the configuration of the economy, we find diverse patterns in the response of factor earnings to international and policy shifts. The analysis relates to a number of long-standing concerns in developing economies, especially those of Latin America, and to the recent literature that has brought the role of international trade in shaping domestic social cleavages and policy tradeoffs back to the fore.

Keywords: Income distribution; Factor endowments; International trade; Non-tradable goods (search for similar items in EconPapers)
JEL-codes: E25 F16 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2016-11
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Journal Article: Income Distribution, Factor Endowments, and Trade Revisited: The Role of Non-Tradable Goods (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ake:iiepdt:201614

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