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The correlation between trade and inequality : An inter-regional analysis of Italy

Caliò, Stefano
(2017)

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Supervisors
Vannoorenberghe, Gonzague
Faculty
Faculté des sciences économiques, sociales, politiques et de communication
Degree label
Master [120] en sciences économiques, orientation générale
Abstract
The link between international trade and inequality has been the object of impressive layman and academic debate over the last decades. On the one hand, worries about possible negative outcomes from opening to trade fostered a great deal of discussion among workers facing increased, cheaper competition from foreign firms; on the other hand, economists have tried to establish the existence of this phenomenon (or lack thereof) and possibly quantify it, to help guide policy towards either a more open, globalised world or a more closed one. This thesis analyses the correlation between international trade and income inequality, to try and measure the impact of trade on the distribution of income in Italian regions. In order to accomplish this goal, I use econometric techniques such as the standard multiple linear regression and some panel data models, namely fixed and random effects regressions. The results suggest that the link between trade and inequality in the data, if ever present, is very weak and seems to affect only one of the used measures of the Gini index.