Free Trade Agreements and Inequality: The Prospect for the UK Post-Brexit

International Journal of Economics and Financial Issues Pub Date : 2024-07-03 DOI:10.32479/ijefi.15443

Osama Alfalah, Mohammad Ali, Abdullah Alhammadi

引用次数: 0

Abstract

This paper examines the potential effects of Brexit on income inequality in the United Kingdom (UK) and utilizes empirical methods to predict these effects. The study focuses on the impact of trade and Foreign Direct Investment (FDI) on income inequality, using macroeconomic data from 1971 to 2019. By employing cointegration techniques and an Error Correction Model (ECM) on annual time series data, the analysis reveals that higher levels of trade have historically reduced income inequality in the UK over the long term. Consequently, changes in trade resulting from Brexit are expected to have a negative influence on the distribution of income and wealth in the UK. On the other hand, the study finds that higher FDI has only had a short-term negative effect on income distribution in the UK.

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自由贸易协定与不平等：英国脱欧后的前景

本文探讨了英国脱欧对英国收入不平等的潜在影响，并利用实证方法预测了这些影响。研究利用 1971 年至 2019 年的宏观经济数据，重点关注贸易和外国直接投资（FDI）对收入不平等的影响。通过对年度时间序列数据采用协整技术和误差修正模型（ECM），分析表明，从长期来看，较高的贸易水平在历史上减少了英国的收入不平等。因此，英国脱欧导致的贸易变化预计会对英国的收入和财富分配产生负面影响。另一方面，研究发现，较高的外国直接投资只对英国的收入分配产生了短期的负面影响。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Journal of Economics and Financial Issues

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