Adjustment of Wages and Equilibrium Unemployment in a Ricardian Global Economy

This paper develops a dynamic Ricardian model of the world economy exhibiting endogenous wages and equilibrium unemployment. It is shown that international trade serves to give workers an increased stake in job-holding, and, in general equilibrium, leads to higher real earnings and lower equilibrium...

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Main Author: HOON, Hian Teck
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2001
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Online Access:https://ink.library.smu.edu.sg/soe_research/76
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spelling sg-smu-ink.soe_research-10752010-09-23T05:48:03Z Adjustment of Wages and Equilibrium Unemployment in a Ricardian Global Economy HOON, Hian Teck This paper develops a dynamic Ricardian model of the world economy exhibiting endogenous wages and equilibrium unemployment. It is shown that international trade serves to give workers an increased stake in job-holding, and, in general equilibrium, leads to higher real earnings and lower equilibrium unemployment. Economic shocks emanating in one country affect the trading partner's equilibrium unemployment rate by shifting the terms of trade. The generality of the results are discussed along three dimensions: replacing efficiency wages with bargaining in labor market; introducing role for market sizes and factor proportion differences; and introducing firm-specific training to generate dynamics. 2001-01-01T08:00:00Z text https://ink.library.smu.edu.sg/soe_research/76 info:doi/10.1016/s0022-1996(00)00084-2 Research Collection School Of Economics eng Institutional Knowledge at Singapore Management University Economics
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Economics
spellingShingle Economics
HOON, Hian Teck
Adjustment of Wages and Equilibrium Unemployment in a Ricardian Global Economy
description This paper develops a dynamic Ricardian model of the world economy exhibiting endogenous wages and equilibrium unemployment. It is shown that international trade serves to give workers an increased stake in job-holding, and, in general equilibrium, leads to higher real earnings and lower equilibrium unemployment. Economic shocks emanating in one country affect the trading partner's equilibrium unemployment rate by shifting the terms of trade. The generality of the results are discussed along three dimensions: replacing efficiency wages with bargaining in labor market; introducing role for market sizes and factor proportion differences; and introducing firm-specific training to generate dynamics.
format text
author HOON, Hian Teck
author_facet HOON, Hian Teck
author_sort HOON, Hian Teck
title Adjustment of Wages and Equilibrium Unemployment in a Ricardian Global Economy
title_short Adjustment of Wages and Equilibrium Unemployment in a Ricardian Global Economy
title_full Adjustment of Wages and Equilibrium Unemployment in a Ricardian Global Economy
title_fullStr Adjustment of Wages and Equilibrium Unemployment in a Ricardian Global Economy
title_full_unstemmed Adjustment of Wages and Equilibrium Unemployment in a Ricardian Global Economy
title_sort adjustment of wages and equilibrium unemployment in a ricardian global economy
publisher Institutional Knowledge at Singapore Management University
publishDate 2001
url https://ink.library.smu.edu.sg/soe_research/76
_version_ 1770569021893115904