International Trade and the Income Inequality gap Between Delevoped and Developing Countries

The aim of this study is to identify what effects international trade, in the form of exports have on the income gap between the developed and developing countries. This paper analyses how the share of exports to developed countries in the form of total exports and exports of intermediate goods, are related to the country’s Gross Domestic Product. The focus will be on analysing how trade will reduce the gap and will pay close attention to developing countries. Eventually this paper will show that international trade benefits all countries but it favours developed countries more, which in turn will cause the gap to increase.