Economics, Econometrics and Finance
4 years ago

Trade doesn't solve unemployment: Inequality persists due to labor market imperfections.

2 views
MPRA Paper
Inheritance, Search Friction and International Trade: A General Equilibrium Model
Debojyoti Mazumder

Paper Summary

The article explores how trade can create differences in labor market imperfections between countries, leading to comparative advantage. Even with free trade, wage inequality and unemployment can persist due to status-conscious preferences and search frictions in the labor market.

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