The Investigation of Foreign Trade Effect on Income Distribution between each Urban Income Deciles of Iran
Sayyed Abdolmajid Jalaee
Associated Professor, Department of Economics, Shahid Bahonar University of Kerman
Mostafa Gorgini
MA Student, Department of Economics, Shahid Bahonar University of Kerman
Abstract
Foreign trade is one of the important issues, which has significant role in every economy. Moreover, one of the central goals of a society is social equity, and it is important that the form of equity in income distribution. This will be important when the impact of the trade structure between each income decile investigated. Therefore, this paper investigated the foreign trade effect on Gini coefficient in each income deciles based on VAR and VECM models. In order to this aim, the time series data of period 1979-2009 were used. The results indicate that, in short –term, the increasing of the foreign trade volume causes the Gini coefficient decreases in all income deciles; consequently, the income distribution will be more equality. Of course, in short –term, the intensity of foreign trade effect on the Gini coefficient intwohigh and low income deciles is more than in other income deciles. Our results revealed that, in the long term, the Gini coefficient between foreign trade and direct relationship of bottom six deciles, there is an inverse relationship between the four upper deciles. This inverse relationship is increasing in the upper deciles to the tenth deciles, so that in itself is the most intense.
Keyword: Foreign trade, Income disturbance, Gini coefficient, Income deciles
JEL: C32, F14, O15 |
