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Income Inequality and Trade Flows: A Country Study for 2001

This paper tests the relationship between income inequality and trade flows. The model is based upon Helena Bohman and Désirée Nilsson (2007) and Mitra Trindade and Dalgin (2008). This paper will set up gravity model for 50 countries which includes, income distribution, population, average individual income level and GINI variable as distribution of disposable income as an explanatory variables. Results confirm that when income inequality increases in the exporting country, export of necessities increase and export of luxuries decrease. Income distribution also shows expected effect on trade flows in the importing country. When income inequality increases in the importing country, import of necessities decrease and import of luxuries increase.

Identiferoai:union.ndltd.org:UPSALLA1/oai:DiVA.org:sh-9212
Date January 2011
CreatorsCorlu, Anil
PublisherSödertörns högskola, Institutionen för samhällsvetenskaper
Source SetsDiVA Archive at Upsalla University
LanguageEnglish
Detected LanguageEnglish
TypeStudent thesis, info:eu-repo/semantics/bachelorThesis, text
Formatapplication/pdf
Rightsinfo:eu-repo/semantics/openAccess

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