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Vertical Specialization, International Task Fragmentation, and Convergence

Author

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  • Sugata Marjit
  • Reza Oladi

Abstract

In this paper, we construct an elaborate general equilibrium model with a continuum of production fragments for an intermediate good, then embed it in a growth model to address the effects of global production fragmentation, vertical specialization and trade on growth and inequality for a small developing country. Among other results, we show that a small developing economy grows faster than the rest of the world as a result of global fragmentation and trade in intermediates if it is skilled-labor scarce. We also address the effects of such trade opening on wage inequality.

Suggested Citation

  • Sugata Marjit & Reza Oladi, 2021. "Vertical Specialization, International Task Fragmentation, and Convergence," CESifo Working Paper Series 9406, CESifo.
    • Handle: RePEc:ces:ceswps:_9406
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    References listed on IDEAS

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    More about this item

    Keywords

    vertical specialization; trade; growth; inequality;
    All these keywords.

    JEL classification:

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

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