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Schumpeterian Growth, North-South Trade and Wage Rigidity

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Author Info
Wolf-Heimo Grieben (University of Dortmund)

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Abstract

This paper presents a two-country non-scale Schumpeterian endogenous growth model with interindustry North-South trade and wage rigidity in the North. Its purpose is to analyze the effects of a compression of the wage structure and an increase in unemployment benefits on Northern unskilled unemployment and growth. Both innovation and skill acquisition rates are endogenously determined. We show how the two labor market policies differ with respect to education incentives in a general equilibrium with balanced trade. We further highlight the relevance of North-South trade and incomplete Northern specialization for the labor market effects that we obtain in our model. We demonstrate that the growth effects of a compression of the Northern wage structure depend decisively on the specific formulation of rising R&D difficulty.

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Publisher Info
Article provided by Berkeley Electronic Press in its journal Contributions to Macroeconomics.

Volume (Year): 4 (2004)
Issue (Month): 1 ()
Pages: 1160-1160
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Handle: RePEc:bep:maccon:v:4:y:2004:i:1:p:1160-1160

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Related research
Keywords: Schumpeterian Growth North-South Trade Wage Rigidity Unemployment Benefits

Find related papers by JEL classification:
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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  18. Thomas M. Steger, 2003. "The Segerstrom Model: Stability, Speed of Convergence and Policy Implications," Economics Bulletin, Economics Bulletin, vol. 15(4), pages 1-8. [Downloadable!]
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  20. Coen N. Teulings, 2003. "The contribution of minimum wages to increasing wage inequality," Economic Journal, Royal Economic Society, vol. 113(490), pages 801-833, October. [Downloadable!] (restricted)
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  21. Dominique Goux & Eric Maurin, 2000. "The Decline In Demand For Unskilled Labor: An Empirical Analysis Method And Its Application To France," The Review of Economics and Statistics, MIT Press, vol. 82(4), pages 596-607, November. [Downloadable!] (restricted)
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  22. Michelle Alexopoulos, 2003. "Growth and unemployment in a shirking efficiency wage model," Canadian Journal of Economics, Canadian Economics Association, vol. 36(3), pages 728-746, August. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Wolf-Heimo Grieben, 2006. "Globalization with Labor Market Frictions and Non-Scale Growth," DEGIT Conference Papers c011_053, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
    Other versions:
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