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

Download or read book Does Trade and Technology Transmission Facilitate Inequality Convergence? An Inquiry Into the Role of Technology in Reducing the Poverty of Nations written by Gouranga Gopal Das and published by International Monetary Fund. This book was released on 2007 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.