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A Many-Country, Many-Good Model of Labor Market Rigidities as a Source of Comparative Advantage

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Author Info

  • Alejandro Cuñat
  • Marc J. Melitz

Abstract

We extend the theoretical framework in Cuñat and Melitz (2007) to a many-country setup where countries exhibit different degrees of labor market flexibility. We rely on the insights from a recent paper by Costinot (2009) to obtain precise predictions about comparative advantage in this setting: countries with more flexible labor markets specialize in more volatile industries. (JEL: F1, F16) (c) 2010 by the European Economic Association.

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Bibliographic Info

Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 8 (2010)
Issue (Month): 2-3 (04-05)
Pages: 434-441

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Handle: RePEc:tpr:jeurec:v:8:y:2010:i:2-3:p:434-441

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Cited by:
  1. Heiwai Tang, 2010. "Labor Market Institutions, Firm-specific Skills, and Trade Patterns," Discussion Papers Series, Department of Economics, Tufts University 0755, Department of Economics, Tufts University.
  2. Felbermayr, Gabriel J. & Larch, Mario & Lechthaler, Wolfgang, 2012. "Endogenous labor market institutions in an open economy," International Review of Economics & Finance, Elsevier, vol. 23(C), pages 30-45.
  3. Peters, Heiko & Weigert, Benjamin, 2011. "Beschäftigungsentwicklung innerhalb multinationaler Unternehmen während der globalen Rezession 2008/2009," Working Papers 04/2011, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
  4. Ferguson, Shon & Formai, Sara, 2012. "Institution-Driven Comparative Advantage and Organizational Choice," Working Paper Series 925, Research Institute of Industrial Economics.
  5. Alexandre Janiak & Etienne Wasmer, 2012. "EPL and capital-labor ratios," Documentos de Trabajo 288, Centro de Economía Aplicada, Universidad de Chile.

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