DP1126 Trade and Convergence Among Countries

Author(s): Dan Ben-David
Publication Date: February 1995
Keyword(s): Economic Growth, Income Convergence, International Trade
JEL(s): F1, O1, O5
Programme Areas: International Macroeconomics, International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1126

This paper examines the relationship between trade and income convergence by focusing on groups of countries comprising major trade partners. The majority of these groups exhibited significant convergence. Furthermore, a comparison of the trade-based groups with different, randomly selected, country groupings shows that the former were more likely to exhibit convergence than the latter. Finally, there is evidence that the magnitude of growth in trade is related to the degree of the income convergence among countries.