The Distributive Effects of Joining the Global Economy in Iran: the Application of ARDL Model

Abstract

In this paper the relationship between globalization and distribution of income in Iran with using of time series data over 1977-2007 is investigated. For this purpose, we used Auto Regressive Distributed Lag (ARDL) model and long-run and short-run relations between involved variables in model are considered. The trade intensity index is used as measure of globalization. Results indicated that, there is long-run relationship and co-integration between involved variables and the Gini coefficient. Furthermore, accompanied by other variables globalization, has a positive and significant effect on dependent variable. Value of error correction coefficient is equal to -0.90 and statistically significant and suggests a high speed of convergence to equilibrium.