The Investigation of Foreign trade effect on Income disturbance between each rural income deciles of Iran.

This paper investigated the foreign trade effect on Gini coefficient in each income deciles based on VAR and VCEM models. In connection with this, the time series data over the period 1369-1394 are employed. The results indicate that, in short –term, rising in foreign trade volume rising causes the Gini coefficient lessen in all income deciles; consequently, the income disturbance will be more equality. Of course, in short –term, the intensity of foreign trade effect on the Gini coefficient in lower income deciles is more than in higher income deciles. Our results revealed that, in long-run, there is positive relationship between the Gini coefficients and the five lower - income deciles while it is negative in the top five income deciles. Thus, rising in foreign trade improve the income disturbance in the top five income deciles, in log-run. These results can help to officials in long and short term foreign trade planning so as to achieve income disturbance equality.