Why international trade may not have been the cause

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Reference no: EM132207443

Question: International trade affects the distribution of incomes within trading countries. [You may use numeric examples, graphs, or clear verbal arguments for any of your answers.]

1. South America is the continent with arguably the most pronounced swings in inequality over the past two decades. By many measures, income inequality in Latin America has become more pronounced over the 1990s but less extreme over the 2000s. Discuss two potential explanations [of your choice] why international trade in final goods may have been a cause. Offer two alternative explanations [of your choice] why international trade may not have been the cause.

2. Offer an explanation why foreign direct investment and trade in intermediate goods may overturn the rationale from trade in final goods.

Reference no: EM132207443

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