《Trade liberalization and income convergence a comment》.pdf

Journal of International Economics 55 (2001) 229–234 www.elsevier.nl/locate/econbase Trade liberalization and income convergence: a comment Dan Ben-David* School of Government and Policy, Tel Aviv University, Ramat Aviv, Tel Aviv 69978, Israel and NBER, 1050 Massachusetts Ave., Cambridge, MA 02138, USA and CEPR, 90 – 98 Goswell Road, London EC 1V 7RR, UK Received 22 September 2000; accepted 22 September 2000 Abstract When examining the relationship between trade liberalization and income convergence across countries, it is important to distinguish between formal and actual periods of trade liberalization. Furthermore, the degree of liberalization and the extent of trade between the liberalizing countries are important factors that influence the link between liberalization and convergence. Evidence suggests that postwar trade reforms in which major trade partners substantially reduced barriers on trade with one another culminated in income convergence between the trade-liberalizing countries.  2001 Elsevier Science B.V. All rights reserved. Keywords : Trade; Liberalization; Convergence; Growth 1. Introduction Is trade liberalization related to income convergence across countries? Slaughter (2000) focuses on a number of postwar multilateral trade agreements examined a number of years earlier, within the same context, by this author (Ben-David, 1993). While an analysis and statistical examination of these agreements comprises the basis for both paper’s conclusions, their conclusions vary considerably. The source of this variance in conclusions is the focus here. The difference-in-differences methodology implemented in the