Working Paper

Non-Gravity Trade


Abstract: This paper examines the relationship between countries’ bilateral trade with the United States that is not due to gravity (non-gravity trade) and the distribution of income within countries. In countries where only a small share of the population is educated, an increase in non-gravity trade is associated with a significant increase in income inequality. As education of the population increases, the correlation between non-gravity trade and income inequality becomes smaller. Non-gravity trade has no significant effect on income inequality in countries that are world leaders in education.

Keywords: Education; Inequality; Non-Gravity Trade;

JEL Classification: F1; E2;

https://doi.org/10.24149/gwp388

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Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Part of Series: Globalization Institute Working Papers

Publication Date: 2020-05-29

Number: 388

Pages: 77