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| Author: | Fischer, R. |
| Title: | Income distribution in the dynamic two-factor trade model |
| Journal: | Economica
1992 : MAY, VOL. 59:234, p. 221-234 |
| Index terms: | INCOMES DISTRIBUTION TRADE DYNAMIC MODELS LIBERALISM |
| Language: | eng |
| Abstract: | A dynamic two-factor trade model with heterogeneous agents has been developed in order to examine the effects of trade liberalization on income distribution. The advantage of the model with heterogeneous agents is that, in addition to examining inter-generational redistribution, it is possible to study intra-generational redistribution. Assuming that the consumption good is labour intensive, it is shown that trade liberalization leads to reductions in inequality for all future generations in labour-abundant countries. The opposite is true when the country is capital-abundant. |
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