Globalization and Inequality: Evidence from Within China

In this paper, we provide a case study of the impact of globalization on income inequality using data across Chinese regions. The literature on cross-country studies has been criticized because differences in legal systems and other institutions across countries are difficult to control for, and the inequality data across countries may not be compatible. An in-depth case study of a particular country's experience can provide a useful complement to cross-country regressions. We construct a measure of urban-rural income ratio for 100 or so Chinese cities (urban areas and adjacent rural counties) over the period 1988-1993. The central finding is that cities that experience a greater degree of openness in trade also tend to demonstrate a greater decline in urban-rural income inequality. Thus, globalization has helped to reduce, rather than increase, the urban-rural income inequality. This pattern in the data suggests that inferences based solely on China's national aggregate figures (overall openness and overall inequality) can be misleading. The negative association between openness and inequality holds up when we apply a geography-based instrumental variable approach to correct for possible endogeneity of a region's trade openness.

Is the late near-infrared bump in short-hard GRB 130603B due to the Li-Paczynski kilonova?

Short-hard gamma-ray bursts (GRBs) are widely believed to be produced by the merger of two binary compact objects, specifically by two neutron stars or by a neutron star orbiting a black hole. According to the Li-Paczynski kilonova model, the merger would launch sub-relativistic ejecta and a near-infrared/optical transient would then occur, lasting up to days, which is powered by the radioactive decay of heavy elements synthesized in the ejecta. The detection of a late bump using the {\em Hubble Space Telescope} ({\em HST}) in the near-infrared afterglow light curve of the short-hard GRB 130603B is indeed consistent with such a model. However, as shown in this Letter, the limited {\em HST} near-infrared lightcurve behavior can also be interpreted as the synchrotron radiation of the external shock driven by a wide mildly relativistic outflow. In such a scenario, the radio emission is expected to peak with a flux of $\sim 100 \mu$Jy, which is detectable for current radio arrays. Hence, the radio afterglow data can provide complementary evidence on the nature of the bump in GRB 130603B. It is worth noting that good spectroscopy during the bump phase in short-hard bursts can test validity of either model above, analogous to spectroscopy of broad-lined Type Ic supernova in long-soft GRBs.Comment: 4 pages, 2 figures, published in ApJ Lette