Endogenous liberalization and within-country inequality

We model and empirically test the link between income inequality and trade liberalization. We consider a society in which a median voter (MV) will make the decision as to whether the country should switch from its current regime of import substitution (IS) (which protects agriculture) to export promotion (EP). Liberalization entails starting importing the agricultural good and specializing in and exporting the manufacturing good. This will require transferring labor to manufacturing. We find that if MV is a worker, the IS-EP switch will take place regardless. If MV is a farmer, the switch will take place given (1) the relative productivity of an ex-farmer and worker in manufacturing,ß is high, and (2) the society’s tastes for agricultural goods, α, are not as strong as those for manufacturing goods. We also find that, following a switch, the income distribution too will improve if α is low and ß is high. In our empirical analysis, we find the endogenous inflection points of α and ß in our sample, at which the direction of change in income distribution alters its sign. Our results also show in a very robust fashion that, EP regimes - on average and with the presence of certain control variables - have better income distributions than IS regimes. This implies that mostly “right” countries have made the switch.

Trade liberalisation and economic growth in Fiji : an empirical assessment using the ARDL approach

This study investigates the effect of trade liberalization on economic performance in Fiji using a Cobb-Douglas production function, which is expanded to take into account political instability and trade liberalization. The long run results conform to theoretical expectations, except for the contribution of labour force, which is negatively related to real Gross Domestic Product. We attribute this to the rapid and consistent emigration of skilled labour following the 1987 coups. While human capital was found to be the most influential variable, exports and investment were found to be weakly related to Gross Domestic Product. The key finding is that the dummy variable for signing the IMF agreement in 1984 had a statistically significant positive effect on real Gross Domestic Product in the long run, but the short run effects of signing the agreement as well as the short run and long run effects of implementing the agreement in 1986 were statistically insignificant.

The impact of trade liberalization on import demand

In this paper, we empirically analyze the effects of trade reforms on import demand and derive their implications on economic development in Turkey, a country that underwent sudden and substantial trade liberalization in the mid-1980s. The tool for this analysis is the estimation of disaggregated import demand elasticities. The adoption of a more liberal trade regime as well as radical attempts to foster economic development makes the Turkish experience particularly interesting for analysis. Almost all of our elasticities are estimated to be significant, unlike those of most previous studies in the literature on other countries. We test for different elasticities over “closed” and “open” economy periods, and find that the effects of the trade reforms of the 1980s were significant for a number of industries that form the backbone of the Turkish economy. We also compare our results with elasticity estimates from past studies for developed countries.

Economic growth with foreign saving?

Highly indebted countries, particularly the Latin American ones, presented dismal economic outcomes in the 1990s, which are the consequence of the ‘growth cum foreign savings strategy’, or the Second Washington Consensus. Coupled with liberalization of international financial flows, such strategy, which did not make part of the first consensus, led the countries, in the wave of a new world wide capital flow cycle, to high current account deficits and increase in foreign debt, ignoring the solvency constraint and the debt threshold. In practical terms it involved overvalued currencies (low exchange rates) and high interest rates; in policy terms, the attempt to control de budget deficit while the current account deficit was ignored. The paradoxical consequence was the adoption by highly indebted countries of ‘exchange rate populism’, a less obvious but more dangerous form of economic populism.

Economic relations of Brazil and the United States and the Enterprise for the Americas Initiative

Includes bibliography

Economic reforms, growth and employment: labour markets in Latin America and the Caribbean

Includes bibliography

Investment and economic reform in Latin America

Includes bibliography

Review of Caribbean economic and social performance in the 1980's and 1990's

Includes bibliography

Agricultural incentives, growth and poverty in Latin America and the Caribbean: cross-country evidence for the period 1960-2005. Did trade liberalization increase the incomes of the poorest?

Includes bibliography

Maritime transport liberalization and the challenges to further its implementation in Chile

Includes bibliography

Changes in the distribution of income and the New Economic Model in Colombia

Includes bibliography

Trade liberalization in Latin America

Includes bibliography

The effects of growth and economic reform on income distribution in Latin America

Includes bibliography

The fiscal impact of trade liberalization and commodity price fluctuation: the case of Dominican Republic, 1980-1998

Includes bibliography

The fiscal impact of trade liberalization and commodity price fluctuation: the case of Costa Rica, 1980-1998

Includes bibliography