Working Paper: CEPR ID: DP1126
Authors: Dan Bendavid
Abstract: This paper examines the relationship between trade and income convergence by focusing on groups of countries comprising major trade partners. The majority of these groups exhibited significant convergence. Furthermore, a comparison of the trade-based groups with different, randomly selected, country groupings shows that the former were more likely to exhibit convergence than the latter. Finally, there is evidence that the magnitude of growth in trade is related to the degree of the income convergence among countries.
Keywords: international trade; income convergence; economic growth
JEL Codes: F1; 01; 05
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| initial income levels (D31) | trade levels (F19) |
| initial income levels (D31) | income convergence (F62) |
| trade relationships (F10) | income convergence (F62) |
| trade levels (F19) | income convergence (F62) |
| magnitude of trade growth (F10) | degree of income convergence (F62) |