Equalizing Exchange: A Study of the Effects of Trade Liberalization / Dan Ben-David.

Format:

Book

Author/Creator:

Ben-David, Dan.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3706.

NBER working paper series no. w3706

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Equalizing Exchange

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1991.

Summary:

It has been quite broadly documented that, historically, there has not been widespread convergence in levels of income across countries. This paper addresses the question of whether the behavior of cross-country income differentials over time, within a specified group of countries, might be affected by the removal of trade barriers. The analysis focuses on the evolutionary period of the European Economic Community, which is characterized by a specific timetable for the removal of trade barriers. This liberalization is shown to be strongly related to a significant income convergence that took place between the members of the Community. The evidence indicates that, until their trade became more liberalized, the income differentials between the countries of the EEC behaved very much like the income differentials between the industrialized countries today. After the onset of freer trade, the EEC countries achieved a reduction in income disparity that exhibited a marked similarity to the income convergence that occurred between the states of the U.S. This came about despite the fact that inter-state migration is considerably more widespread and unrestricted than are labor movements within the European Community.

Notes:

Print version record

May 1991.