Trade Agreement Inequality

International trade, the network that underlying globalization, shows extreme inequality. Despite the efforts of multilateral organizations to promote a more just world through trade agreements, it is difficult to assess the impact of these changes on such a complex system. We used a numerical simulation on a recently published network model to measure the impact of simple measures to increase trade opportunities between the weakest economies. The results suggest that global inequality could be reduced, which would improve trade between low-income economies. These results underscore the considerable heterogeneity in the impact of trade policy, both between countries and between households. Not everyone benefits from trade and some households lose significantly. Annual economic growth was 3.2%, about one point lower than in the twenty years after World War II, but very strong compared to what followed. The World Trade Network`s stochastic model is a numerical test to compare the assessment of the impact of inequality mitigation measures. Sweden`s social democratic stronghold, for example, has been free trade for a long time because it is good for the economy as a whole.

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