International Journal of Nonlinear Analysis and Applications
The effect of drug price liberalization on income distribution; A mathematical approach
Document Type : Research Paper
Authors
Department of Economics, Faculty of Law and Economics, Khomeinishahr Branch, Islamic Azad University, Khomeinishahr, Isfahan, Iran
Abstract
The self-reversion pattern with distribution breaks has been used and the statistics cover the time period from 1971 to 2006. The results of short-term and long-term models show that economic growth has reduced poverty in the short term but has had no effect on inequality. In the long term, although economic growth has been poverty-relieving, it has increased inequality. In the long term, the openness of the economy to trade has directly increased the average income of the poor through the effect on income distribution, therefore, the openness of the economy through two direct (effect on income distribution) and indirect (effect on economic growth) can cause a decrease become poor While openness to foreign direct investment does not have a direct effect on the average income of the poor and can only be effective on poverty through the effect on economic growth. Therefore, the specific proposal of this article is that Iran can use world trade and economic openness as a tool to reduce inequality and poverty if economic infrastructures are reformed.
Keywords
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Volume 14, Issue 2
February 2023Pages 75-85
- Receive Date: 01 February 2022
- Revise Date: 29 April 2022
- Accept Date: 01 May 2022