Unformatted text preview: 0.939 1.000 sources: World Development Indicators (2005); Human Development Report (2003) Trading Up x Of the countries in the table above, the ones which have the highest levels of human development, are generally the ones that engage in more international trade. x the Human Development Index is positively correlated with: o a country’s share of exports in GDP o a country’s share of imports in GDP x the correlations are not perfect, but they are significant moral of the story x Countries gain from trade , x if they specialize in producing the goods x in which they have a comparative advantage , x although there may be distributional effects to consider: o workers who are not working in the sector where the country has a comparative advantage will be adversely affected by free trade o ex. in America steel workers, textile workers and farmers are adversely affected by trade Page 27...
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- Fall '10
- International Trade, Gdp, Human Development Index