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Local Trade Networks and Spatially Persistent Unemployment

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  • Nienke Oomes

    (International Monetary Fund)

Abstract

This paper studies the effect of local trade networks on the spatial distribution of employment in a Cooper and John (1988) type model with effective demand externalities. It is shown that, if labor can be hired in continuous quantities, then the long run spatial distribution of employment is uniform, and independent of any trade network topology. When labor has binary support, however, local trade networks are shown to generate spatial unemployment clusters which can persist indefinitely.

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File URL: http://128.118.178.162/eps/it/papers/0211/0211004.pdf
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Bibliographic Info

Paper provided by EconWPA in its series International Trade with number 0211004.

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Length: 63 pages
Date of creation: 19 Nov 2002
Date of revision:
Handle: RePEc:wpa:wuwpit:0211004

Note: Type of Document - pdf; prepared on Macintosh; to print on HP/PostScript; pages: 63 ; figures: included
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Web page: http://128.118.178.162

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Keywords: trade networks unemployment local interactions cellular automata;

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References

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  10. Maurice Obstfeld & Kenneth Rogoff & Ben Bernanke & Kenneth Rogoff, . "The Six Major Puzzles in International Macroeconomics: Is there a Common Cause?," Working Paper 32326, Harvard University OpenScholar.
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Cited by:
  1. Meissner, C.M. & Oomes, N., 2006. "Why Do Countries Peg the Way They Peg? The Determinants of Anchor Currency Choice," Cambridge Working Papers in Economics 0643, Faculty of Economics, University of Cambridge.
  2. Brock,W.A. & Durlauf,S.N., 2005. "Social interactions and macroeconomics," Working papers 5, Wisconsin Madison - Social Systems.
  3. Yannis M. Ioannides & Linda Datcher Loury, 2002. "Job Information Networks, Neighborhood Effects and Inequality," Discussion Papers Series, Department of Economics, Tufts University 0217, Department of Economics, Tufts University.

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