Impact of Trade Flows on Income Distribution in Angola
Opening to international trade has been a crucial factor in the development and growth of economies for the last decades. On the other hand, it is known that opening brings advantages and disadvantages for economies. Income inequality can thus be related to these disadvantages which have been increasing in certain countries. The aim of this study is to find out whether trade flows have an impact on income inequality related to trade opening in Angola. Ordinary Least Squares method is used to analyze the relationship between variables over the period 2000-2017. In order to define the effect of international trade on the income inequality Gini coefficient is analyzed along with export and import values of Angola. Gini values are gathered from World Inequality Database with 0 representing perfect equality and 1 meaning perfect inequality. Other macroeconomic variables are used such as unemployment and short term debt stock along with export and import to assure the relationship between Gini and foreign trade variables. According to the model results, exportation has a negative effect on Gini coefficient, while importation, unemployment and debt have a positive impact on Gini.
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