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Trade and Personal Distribution of Wealth and Income: Beyond the Stolper–Samuelson Theorem
Author(s) -
Das Satya P.
Publication year - 2001
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/1468-0106.00116
Subject(s) - economics , class (philosophy) , distribution (mathematics) , middle class , inequality , personal income , income distribution , wealth distribution , economic inequality , international economics , macroeconomics , mathematics , market economy , mathematical analysis , artificial intelligence , computer science
The effect of international trade on personal distribution of wealth and income is examined via the Stolper–Samuelson Theorem. It is shown that free trade between North and South increases (decreases) wealth and income inequality in the North (South). A concept of three classes – lower, middle and upper – is developed. It is shown that North–South free trade in goods leads to a middle class squeeze in the North and a middle class expansion in the South.