Delay and dynamics in labor market adjustment: Simulation results

A-Tier
Journal: Journal of International Economics
Year: 2008
Volume: 75
Issue: 1
Pages: 1-13

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

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.

Technical Details

RePEc Handle
repec:eee:inecon:v:75:y:2008:i:1:p:1-13
Journal Field
International
Author Count
3
Added to Database
2026-01-24