International trade and the equilibrium rate of unemployment in a Heckscher-Ohlin world economy
This paper develops a (stylized Asia-America) Heckscher-Ohlin world economy in which the equilibrium rate of unemployment is endogenous. We examine the impact of various economic shocks on unemployment in the global economy. Harrod-neutral or Hicks-neutral technical progress across all industries in...
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
1994
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| Online Access: | https://ink.library.smu.edu.sg/soe_research/433 https://ink.library.smu.edu.sg/context/soe_research/article/1432/viewcontent/International_Trade_and_the_Equilibrium_Rate.pdf |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | This paper develops a (stylized Asia-America) Heckscher-Ohlin world economy in which the equilibrium rate of unemployment is endogenous. We examine the impact of various economic shocks on unemployment in the global economy. Harrod-neutral or Hicks-neutral technical progress across all industries in Asia leads to a terms of trade improvement for America but raises America's unemployment rate. Introducing a third country such as the block of former socialist economies results in higher unemployment for both Asia and America. Protection in America lowers American equilibrium unemployment but raises Asia's unemployment. |
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