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Does Trade and Technology Transmission Facilitate Inequality Convergence? An Inquiry into the Role of Technology in Reducing the Poverty of Nations

Author/Editor: Das, Gouranga Gopal
Authorized for Distribution: January 1, 2007
Electronic Access: Free Full Text (PDF file size is 570KB)
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.

Summary: Based on stylized evidence showing variation of the Gini coefficient of income inequality across skill cohorts and on the rapid rise in trade in technology-intensive goods, the ripple effects of technology transmission and income inequality are explored in a global Computable General Equilibrium (CGE) framework. An exogenous technology shock transmitted via trade from the United States induces productivity growth in developing regions. This spillover capture-aided by absorptive capability, better governance and institutions, technological symmetry and social acceptance-causes income to increase and income inequality to decline. The conjoined parameters retard growth's inequality-enhancing effect and thus facilitate long-run convergence of inequality between nations.
 
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Series: Working Paper No. 07/16
Subject(s): Fiscal policy | Risk management | Government expenditures | Bond markets | Emerging markets
Author's keyword(s): Inequality | spillover | governance | institution | Gini Coefficient | skill cohorts | growth
 
English  
    Published:   January 1, 2007        
    ISBN/ISSN:   1934-7073   Format:   Paper
    Stock No:   WPIEA2007016   Pages:   38
    Price:   US$18.00 (Academic Rate: US$18.00 )
       
     
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