Examine the effect of trade on income inequality in Australia. Write a literature review in 500 words excluding references.

Effect of trade on income inequality in Australia
Analysis
Inequality of income simply means unequal distribution of income within the society along with variation observed in goods and wealth. Income inequality can be measured by dividing the entire population of a nation with highest income groups and then comparing them with the lowest income groups. To determine the inequality the income is broken into earnings, income from government, income tax, investment income and other supportive payments. Then the different population groups like the sole parents, individuals receiving new start payments and elderly people receiving superannuation funds are all located on the income scale. To measure the income the Australian Bureau of Statistics, Survey of Income and Housing is used as a measurement base (Poverty & Inequality, 2020).
As per the latest survey as per the 2017-18 data the highest 20% of the income scale are living a lifestyle which is with almost six times as much as income with the lowest 20% of the income scale (Australian Bureau of Statistics Survey of Income and Housing Confidentialised Unit).
In Australia due to income inequality various sectors which are impacted are the income and wealth of the individuals. We will try to discuss on the impact of income inequality on trades in developed countries like Australia. There is a strong correlation between the income and trade. Thus countries with higher trade openness like Australia where the GDP is imports plus exports tends to have much higher standards of living and lower income equality.
As per the latest Gini Co-efficient data Australia’s income inequality stands at 0.325 or 32.5% as compared to 47.9% of India which is a developing country. Therefore, the gap between the more open nations like Australia and less open economies like India in terms of GDP per capita and the Gini income coefficient is what the income inequality is about.
Literature Review
Trade openness varies from country to country and has an impact on the trade if the income and inequality variables are impacted. Example if the nation adapts open trade policies and along with it acclimatizes domestic policies which are friendly towards the market, a stable monetary and fiscal policy, therefore if these policies impact the income and inequality, the same factors will have an impact on the open trade policies of the specific country (Diego Cerdeiro and Andras Komaromi, IMF, 2017).
As per Professor Stiglitz, due to income inequality there is shortfall in the aggregate demand and this can lead to unemployment in Australia. Thus concentration of wealth in specific hands is bad for a stable economy like...