Threshold and interaction effects in the trade, growth, and inequality relationship

Vincent Leyaro

No wp-2015-009, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper examines the relationship between trade (exports), growth, and inequality, using a panel of 100 countries over 30 years (1980 to 2010). As there is no clear theoretical relationship between trade (exports) and inequality, and as inequality can be considered a proxy for 'governance quality', the paper also tests for a threshold in inequality for the effect of trade (exports) on growth. The findings are that in general trade openness advances growth while inequality reduces growth.

Keywords: Econometric models (Economic development); Economic growth; Equality and inequality; International trade (search for similar items in EconPapers)
Date: 2015
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