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Varieties, Jobs and EU Enlargement

  • Tito Boeri

    (Università «Bocconi» - Milano)

  • Joaquim Oliveira Martins

    (OECD, Paris)

Small open economies can grow faster than their neighbours without running into a balance of payment crises if they succeed in increasing the number of differentiated goods produced domestically. A further increase in the number of varieties produced in Central and Eastern Europe will require more worker and job re-allocation as production is still largely concentrated in homogeneous good and scale-intensive industries and enterprise density is significantly lower than in Western Europe. Unemployment benefits can support this process by providing seed capital for self-employment choices. But they should be neither too low nor too high. Otherwise, they would prevent restructuring or discourage job search.

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Article provided by SIPI Spa in its journal Rivista di Politica Economica.

Volume (Year): 92 (2002)
Issue (Month): 1 (January-February)
Pages: 139-178

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Handle: RePEc:rpo:ripoec:v:92:y:2002:i:1:p:139-178
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  6. Paul Krugman, 1988. "Differences In Income Elasticities and Trends in Real Exchange Rates," NBER Working Papers 2761, National Bureau of Economic Research, Inc.
  7. Djankov, Simeon & Hoekman, Bernard, 1996. "Intra-Industry Trade, Foreign Direct Investment and the Reorientation of East European Exports," CEPR Discussion Papers 1377, C.E.P.R. Discussion Papers.
  8. A. Richter & M.E. Schaffer, 1996. "The Performance of De Novo Private Firms in Russian Manufacturing," CERT Discussion Papers 9610, Centre for Economic Reform and Transformation, Heriot Watt University.
  9. Neven, Damien J, 1994. "Trade Liberalization with Eastern Nations. How Sensitive?," CEPR Discussion Papers 1000, C.E.P.R. Discussion Papers.
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