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Economic integration, labor reallocation, and growth

Author

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  • Hetze, Pascal

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.

Suggested Citation

  • Hetze, Pascal, 2006. "Economic integration, labor reallocation, and growth," Thuenen-Series of Applied Economic Theory 65, University of Rostock, Institute of Economics.
  • Handle: RePEc:zbw:roswps:65
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    More about this item

    Keywords

    economic integration; job destruction; job creation; endogenous growth;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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