Industrial specialisation, trade, and labour market dynamics in a multisectoral model of technological progress
AbstractThe issue of the impact of trade on specialisation structures and the effects of trade liberalisation on employment and labour markets has been intensively discussed in the recent literature on trade liberalisation and globalisation. In Europe this debate has gained new momentum in the discussion on the effects of the catching-up processes of the transforming economies in Eastern European Countries. But the bulk of the existing literature in this area employs almost without exception a static Heckscher-Ohlin framework based on factor-endowment differences and thus seems not to be a suitable tool for analysing dynamic issues of technology catching-up and dynamic adjustment processes. In this paper I present a model to explore the issue of productivity catching-up, international specialisation and labour market effects in a dynamic multi-sectoral framework with heterogenous labour. The model is basically an input-output model, but also has some Schumpeterian features. These Schumpeterian features are the impact of transitory rents, emerging from (labour) productivity-enhancing technological progress or catching-up processes, upon the price-, wage- and quantity system of the trading economies. Relative productivity and relative wage rate dynamics across sectors determine comparative cost advantages and trade specialisation. The second part of the paper presents some simulation studies of the evolution of prices, output, employment and wage structures, where various stylized types of technological progress and industrial catching-up processes are modelled. In the appendix of the paper the equilibrium solutions of the model are derived.
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Bibliographic InfoPaper provided by Society for Computational Economics in its series Computing in Economics and Finance 2001 with number 230.
Date of creation: 01 Apr 2001
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trade liberalisation; simulation; economic dynamics; growth;
Other versions of this item:
- Robert Stehrer, 2001. "Industrial specialisation, trade, and labour market dynamics in a multisectoral model of technological progress," Economics working papers 2001-02, Department of Economics, Johannes Kepler University Linz, Austria.
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
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