Gravity with unemployment

• 成果类型: Article
• 署名作者: Heid, Benedikt; Larch, Mario
• 署名单位: University of Bayreuth; Leibniz Association; Ifo Institut; University of Bayreuth; Leibniz Association; Ifo Institut
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2016.03.008
• 发表日期: 2016
• 页码: 70-85
• 关键词: Welfare effects of trade; Quantitative trade theory; unemployment; Trade costs; structural estimation; gravity equation

摘要

Quantifying the welfare effects of trade liberalization is a core issue in international trade. Existing frameworks assume perfect labor markets and therefore ignore the effects of aggregate employment changes for welfare. We develop a quantitative trade framework which explicitly models labor market frictions. To illustrate, we assess the effects of trade and labor market reforms for 28 OECD countries. Welfare effects of trade agreements are typically magnified when accounting for employment changes. While employment and welfare increase in most countries, some experience higher unemployment and lower welfare. Labor market reforms in one country have small positive spillover effects on trading partners. (C) 2016 Elsevier B.V. All rights reserved.