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Economic Integration, Labor Reallocation, and Growth

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Author Info
Pascal Hetze () (University of Rostock and Max Planck Institute for Demographic Research)

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Abstract

This paper develops an endogenous growth model with continuous labor reallocation. Economic integration increases the home availability of technologies globally developed. The wider technology pool has implications for the vintage structure of the manufacturing sector and affects the revenues earned in the two sectors R&D and manufacturing. The free exchange of technologies across the borders leads to structural change and labor reallocation within manufacturing and between the sectors. If there arises too much job destruction caused by economic integration, unemployment may be a consequence of more openness to technologies developed abroad.

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File URL: http://www.wiwi.uni-rostock.de/fileadmin/Institute/VWL/VWL-Institut/RePEc/pdf/wp065thuenen.pdf
File Format: application/pdf
File Function: First version, 2006
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Publisher Info
Paper provided by University of Rostock, Institute of Economics, Germany in its series Thuenen-Series of Applied Economic Theory with number 65.

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Length: 27 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:ros:wpaper:65

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Related research
Keywords: economic integration; job destruction; job creation; endogenous growth;

Find related papers by JEL classification:
F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs

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