Peripherality, Inequality, and Economic Development in Latin American Countries
Yoshimichi Murakami and
No DP2017-08, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University
In this study, we analyse new peripheral features of Latin American Countries (LACs), conceptualized by neo-structuralism and the triangular relation between peripherality, inequality, and economic development. We analyse the following as peripheral features: primary commodity dependence, low level of technological progress, poor formation of global value chains (GVCs). On the basis of this triangular relation, we empirically analyse how and to what extent peripherality and inequality affect the income levels in LACs during 1995 to 2014. We find that LACs exhibit a virtuous cycle between a decrease in inequality and an increase in income levels. We also find that although primary commodity dependence, technological progress, and GVC integration directly increase the income levels, they also indirectly decrease the income levels through increasing inequality. Additionally, the increasing effects on inequality is mitigated if a country is integrated into GVCs with higher levels of technological progress.
Keywords: Primary commodity dependence; Technological progress; Global value chains (GVCs); Neo-structuralism (search for similar items in EconPapers)
JEL-codes: F63 O47 O54 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:kob:dpaper:dp2017-08
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