1887

UN Department of Economic and Social Affairs (DESA) Working Papers

The UN Department of Economic and Social Affairs (DESA) Working Papers aim to stimulate discussion and critical comment on the broad range of economic, social and environmental issues associated with the United Nations Development Agenda.

English

Economic Integration, Inequality and Growth

Latin America vs. the European Economies in Transition

This paper presents a simple theoretical framework to explain variations in income inequality over time and between countries. It also analyses the factors responsible for the widespread risein inequality during the neo-liberal reforms of 1980-2000 in the fields of trade, foreign direct investment (FDI) and capital flows, and the rise in migration. Finally, it compares the decline in inequality observed in most of Latin America over 2000-2008 with the steady increase of inequality in many European transition economies during this period despite their return to robust growth. The paper argues that such divergence is explained by differences in policies.

English

Keywords: international economic integration, income inequality, Latin America, policy reforms, transition economies of Europe, neo-liberalism
JEL: F20: International Economics / International Factor Movements and International Business / International Factor Movements and International Business: General; F41: International Economics / Macroeconomic Aspects of International Trade and Finance / Open Economy Macroeconomics; D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions; I20: Health, Education, and Welfare / Education and Research Institutions / Education and Research Institutions: General; E62: Macroeconomics and Monetary Economics / Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook / Fiscal Policy; P27: Economic Systems / Socialist Systems and Transitional Economies / Socialist Systems and Transitional Economies: Performance and Prospects; E24: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity; O54: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Economywide Country Studies: Latin America; Caribbean
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