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Product variety, finite changes and wage inequality

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  • Dutta, Meghna
  • Kar, Saibal
  • Marjit, Sugata

Abstract

This paper presents a model with product variety to examine the effects of emigration and capital mobility between the North and the South on production reorganization and two-sided wage inequality. We obtain conditions under which the production patterns in both North and South undergo ‘finite changes’. Overall, the production and trade patterns may be such that the South produces and exports a homogeneous good while the North, a commodity with varieties — the result driven not by technological changes, but by factor mobility. The results further suggest that the wage inequality rises in both countries in conformity with available empirical evidence.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 35 (2013)
Issue (Month): C ()
Pages: 610-613

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Handle: RePEc:eee:ecmode:v:35:y:2013:i:c:p:610-613

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Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: Product variety; Factor mobility; Finite changes; Wage inequality; Trade patterns;

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