Econ 161 - Lecture 5

Econ 161 Lecture - Lecture5 c ⃝ Marc-AndreasMuendler ,SanDiego April12,2011 5.TradeandIncome Econ161 c ⃝ M.Muendler •

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Unformatted text preview: GlobalIntegrationofLatinAmerica Lecture5 c ⃝ Marc-AndreasMuendler UniversityofCalifornia,SanDiego April12,2011 5.TradeandIncome Econ161, c ⃝ M.Muendler TradeTheoryandComparativeAdvantage • Whydocountriestrade?Shouldtheytrade? 1.Gainsfromspecialization (differencesinendowmentsandtechnology) – TheRicardianmodelstressesgainsforthecountryasawhole (lecture3) – Theassessmentofdistributionaleffectswithinthecountryre- quiresmoreelaboratetheory(lecture5) 2.Gainsfromeconomiesofscale(differencesinsize;lecture7) 5.TradeandIncome Econ161, c ⃝ M.Muendler WorldInequality • Measuresofinequality:Ginicoefficient(measureofconcentration), Theilindex(measureofconcentrationwithconsistencyproperties) • Usually,incomeorwealthinequalityaremeasured Alternatively,consumption,lifeexpectancy,orbody-heightareused • BourguignonandMorrisson(2002):Theilmeasuresofincomein- equalitywithinandbetweencountriesfrom1820to1992 Theilindexescanbeneatlyslicedintoadditivecomponents. • Between-countryinequalityworsensuntil1950andlevelsoff 5.TradeandIncome Econ161, c ⃝ M.Muendler TheilIndexofIncomeInequality1820-1992 T h e i l in d e x Year Inequality within countries Inequality between countries World income inequality 1820 1850 1880 1910 1940 1970 2000 .1 .2 .3 .4 .5 .6 .7 .8 .9 1 Source :BourguignonandMorrison,2002 5.TradeandIncome Econ161, c ⃝ M.Muendler PovertyandInequalityinColombia Indicators 1978 1988 1999 Economy-widePoverty (sharesofpopulation) Povertyrate a .80 .65 .64 Povertygap b .46 .32 .34 Extremepovertyrate a .45 .29 .23 UrbanPoverty Povertyrate a .70 .55 .55 RuralPoverty Povertyrate a .94 .80 .79 Inequality(TheilIndex,urban-ruraldecomposition) Overallinequality .54 .60 .68 Within-areainequality .42 .50 .59 Between-areainequality .12 .10 .09 a Shareofpopulationbelow(extreme)povertyline($2,$1/day) b Averageincomerelativetopovertyline Source :JuanCarlosEcheverry,UniversidaddelosAndes,Colombia 5.TradeandIncome Econ161, c ⃝ M.Muendler GiniIndexofInequalityinLatinAmerica1990-2008 Source :ECLAC, SocialPanoramaofLatinAmerica ,2009 5.TradeandIncome Econ161, c ⃝ M.Muendler IncidenceofPovertyinLatinAmerica1990-2010 Source :ECLAC, SocialPanoramaofLatinAmerica ,2010 5.TradeandIncome5....
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This note was uploaded on 08/14/2011 for the course ECON 161 taught by Professor Muendler during the Spring '11 term at San Diego.

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Econ 161 Lecture - Lecture5 c ⃝ Marc-AndreasMuendler ,SanDiego April12,2011 5.TradeandIncome Econ161 c ⃝ M.Muendler •

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