Growing population imbalances reshape global trade and labor dynamics.
The article explores how different rates of population growth in two countries affect their trade patterns and labor movements. By using a model that considers overlapping generations, the researchers found that unequal population growth leads to variations in wages and capital rentals, influencing production costs and prices. This creates opportunities for trade between countries based on their factor endowments. However, the study shows that traditional trade models may not fully apply in dynamic settings with overlapping generations.