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On Types of Trade,Adjustment of Labor and Welfare Gains During Asymmetric Liberalizations

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  • Yener Kandogan

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    Abstract

    This paper modifies the two-industry, two-country Heckscher-Ohlin model with intermediate goods to decompose trade into its horizontal and vertical intra-industry, as well as inter-industry parts. Acknowledging that liberalization affects each type of trade differently, and that changes in each imply labor adjustment of different magnitudes, the paper analyzes the effects of widely observed asymmetries in liberalization policies. The paper concludes with the implications of the model for the liberalization between the East and the West through the Europe Agreements.

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    File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp568.pdf
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    Bibliographic Info

    Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 2003-568.

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    Length: 26 pages
    Date of creation: 26 Jun 2003
    Date of revision:
    Handle: RePEc:wdi:papers:2003-568

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    Keywords: Trade types; Adjustment; Asymmetric Liberalization; Europe Agreements;

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    1. Gordon H. Hanson, 1998. "Market Potential, Increasing Returns, and Geographic Concentration," NBER Working Papers 6429, National Bureau of Economic Research, Inc.
    2. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-77, March.
    3. Matthew J. Slaughter, 1997. "International Trade and Labor-Demand Elasticities," NBER Working Papers 6262, National Bureau of Economic Research, Inc.
    4. John F. Helliwell, 1997. "National Borders, Trade and Migration," NBER Working Papers 6027, National Bureau of Economic Research, Inc.
    5. Feenstra, R.C. & Hanson, G.H., 1995. "Foreign Investment, Outsourcing and Relative Wages," Department of Economics 95-14, California Davis - Department of Economics.
    6. Baldwin, Robert E. & Mutti, John H. & Richardson, J. David, 1980. "Welfare effects on the United States of a significant multilateral tariff reduction," Journal of International Economics, Elsevier, vol. 10(3), pages 405-423, August.
    7. Werner Antweiler & Daniel Trefler, 2000. "Increasing Returns and All That: A View From Trade," NBER Working Papers 7941, National Bureau of Economic Research, Inc.
    8. Cadot, Olivier & de Melo, Jaime, 1994. "France and the CEECs: Adjusting to Another Enlargement," CEPR Discussion Papers 1049, C.E.P.R. Discussion Papers.
    9. Jolanta Dziembowska-Kowalska & Rolf H. Funck, 2000. "Cultural activities as a location factor in European competition between regions: Concepts and some evidence," The Annals of Regional Science, Springer, vol. 34(1), pages 1-12.
    10. Natalia T. Tamirisa, 1998. "Exchange and Capital Controls As Barriers to Trade," IMF Working Papers 98/81, International Monetary Fund.
    11. Bureau, Jean-Christophe & Marette, Stephan & Schiavina, Alessandra, 1998. "Non-tariff Trade Barriers and Consumers' Information: The Case of the EU-US Trade Dispute over Beef," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(4), pages 437-62.
    12. Brian L. Buhr & Hanho Kim, 1997. "Dynamic Adjustment in Vertically Linked Markets: The Case of the U.S. Beef Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 126-138.
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