We revisit the relationship between international trade, economic growth and income inequality. Our cross-country analysis considers the strength of trade connections as well as characteristics of countries’ export markets and products. We also conduct event studies of past trade liberalization episodes to extract general lessons for the impact of trade on economic growth and inequality. Our research points to two broad messages: First, trade openness and connectivity to the center of the trade network has substantial macroeconomic benefits. Second, deeper trade integration is unlikely to be a key driver of rising income inequality.
