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The specific factors continuum model, with implications for globalization and income risk

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  • Anderson, James E.

Abstract

This paper embeds the specific factors model in the goods continuum approach of Dornbusch et al. (1977, 1980) and applies it to analyze the effect of globalization on income risk. Globalization amplifies sector specific income risk induced by idiosyncratic sectoral technology shocks, but tends to reduce income risk to both mobile and immobile factors induced by aggregate technology shocks that differ by country. Aggregate risk bears most heavily on the poorest specific factors.

Suggested Citation

  • Anderson, James E., 2011. "The specific factors continuum model, with implications for globalization and income risk," Journal of International Economics, Elsevier, vol. 85(2), pages 174-185.
  • Handle: RePEc:eee:inecon:v:85:y:2011:i:2:p:174-185
    DOI: 10.1016/j.jinteco.2011.08.003
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Caselli, Francesco & Koren, Miklos & Lisicky, Milan & Tenreyroy, Silvana, 2015. "Diversification through trade," LSE Research Online Documents on Economics 86293, London School of Economics and Political Science, LSE Library.
    2. Silvana Tenreyro & Miklos Koren & Francesco Caselli, 2012. "Diversification through Trade," 2012 Meeting Papers 539, Society for Economic Dynamics.
    3. Blanchard, Emily & Willmann, Gerald, 2016. "Trade, education, and the shrinking middle class," Journal of International Economics, Elsevier, vol. 99(C), pages 263-278.
    4. Blanchard, Emily & Willmann, Gerald, 2013. "Trade, education, and the shrinking middle class," Kiel Working Papers 1831, Kiel Institute for the World Economy (IfW).
    5. Sebastian Benz & Wilhelm Kohler & Erdal Yalcin, 2016. "Offshoring and Volatility of Demand," CESifo Working Paper Series 5970, CESifo Group Munich.

    More about this item

    Keywords

    Goods continuum; Extensive margin; Factoral terms of trade;

    JEL classification:

    • F10 - International Economics - - Trade - - - General

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