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Research on the Effect of Trade Liberalization on Income Gap

Author: WangLi
Tutor: LinLing
School: Wuhan University
Course: International trade
Keywords: trade liberalization income distribution income gap
CLC: F014.4
Type: Master's thesis
Year: 2005
Downloads: 585
Quote: 4
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Abstract


Although facing many difficulties, trade liberalization is still the irreversible trend in today’s world economy. The gain from trade has been continuously concerned and researched by scholars. As for a specific country, trade liberalization has effect not only on the whole level of welfare but also on the framework of income distribution and income gap. According to Heckscher-Ohlin model and Stolper-Samuelson theorem, after the trade opening ,the payment will increase for the factors which are intensively used in the industries which are expanded as a result of trade opening, while the payment decreases for the factors which are intensively used in the industries which are contracted, thus ,change occur to income gap. Historical experience indicates that the effect of trade liberalization on income distribution is uncertain. Based on traditional international trade theories, this thesis systematically studies the effect of trade liberalization on income distribution and specially emphasizes the transmissing mechanism. Moreover, this thesis analyses the problem that the gap between rich and poor has been rapidly enlarged since China’s opening to the outside world. It should be theoretically and practically significant to rationally advance the opening.The thesis includes five chapters.Chapter One, Two and three review related theories and literature and define related concepts.Chapter Four, on the basis of traditional theories, analyses the effect of trade liberalization on income distribution through variables including commodity price, industry structure, technical advance and so on.Chapter Five discusses the gradually obvious income gap enlargement during the process of trade liberalization in China, and brings forward suggestions about how to make full use of our relative advantage, take measurable protection and optimize income distribution system to benefit the low income circle more when pushing forward trade liberalization after China’s entry to WTO.

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CLC: > Economic > Economics > Basic problems of economics > Sectors of the economy > National income and distribution
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