Delay and Dynamics in Labor Market Adjustment : Simulation Results

• Tác giả: Erhan Artuc
• Ngôn ngữ: eng
• Ký hiệu phân loại: 331.1 Labor force and market
• Thông tin xuất bản: 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 326167
• Chủ đề: 1. International Trade Organizations F130; 2. Models of Trade with Imperfect Competition and Scale Economies F120; 3. Trade Policy

Tóm tắt

We simulate numerically a trade model with labor mobility costs added, modeled in such a way as to generate gross flows in excess of net flows. Adjustment to a trade shock can be slow with plausible parameter values. In our base case, the economy moves 95% of the distance to the new steady state in approximately eight years. Gross flows have a large effect on this rate of adjustment and on the normative effects of trade. Announcing and delaying the liberalization can build--or destroy--a constituency for free trade. We study the conditions under which these contrasting outcomes occur.