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On Types of Trade,Adjustment of Labor and Welfare Gains During Asymmetric Liberalizations

  • Yener Kandogan

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    This paper modifies the two-industry, two-country Heckscher-Ohlin model with intermediate goods to decompose trade into its horizontal and vertical intra-industry, as well as inter-industry parts. Acknowledging that liberalization affects each type of trade differently, and that changes in each imply labor adjustment of different magnitudes, the paper analyzes the effects of widely observed asymmetries in liberalization policies. The paper concludes with the implications of the model for the liberalization between the East and the West through the Europe Agreements.

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    File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp568.pdf
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    Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 2003-568.

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    Length: 26 pages
    Date of creation: 26 Jun 2003
    Date of revision:
    Handle: RePEc:wdi:papers:2003-568
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    1. Natalia T. Tamirisa, 1999. "Exchange and Capital Controls as Barriers to Trade," IMF Staff Papers, Palgrave Macmillan, vol. 46(1), pages 4.
    2. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-77, March.
    3. Feenstra, R.C. & Hanson, G.H., 1995. "Foreign Investment, Outsourcing and Relative Wages," Papers 95-14, California Davis - Institute of Governmental Affairs.
    4. Baldwin, Robert E. & Mutti, John H. & Richardson, J. David, 1980. "Welfare effects on the United States of a significant multilateral tariff reduction," Journal of International Economics, Elsevier, vol. 10(3), pages 405-423, August.
    5. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
    6. Brian L. Buhr & Hanho Kim, 1997. "Dynamic Adjustment in Vertically Linked Markets: The Case of the U.S. Beef Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 126-138.
    7. Werner Antweiler & Daniel Trefler, 2000. "Increasing Returns and All That: A View From Trade," NBER Working Papers 7941, National Bureau of Economic Research, Inc.
    8. John F. Helliwell, 1997. "National Borders, Trade and Migration," NBER Working Papers 6027, National Bureau of Economic Research, Inc.
    9. Jolanta Dziembowska-Kowalska & Rolf H. Funck, 2000. "Cultural activities as a location factor in European competition between regions: Concepts and some evidence," The Annals of Regional Science, Springer, vol. 34(1), pages 1-12.
    10. Bureau, Jean-Christophe & Marette, Stephan & Schiavina, Alessandra, 1998. "Non-tariff Trade Barriers and Consumers' Information: The Case of the EU-US Trade Dispute over Beef," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(4), pages 437-62.
    11. Matthew J. Slaughter, 1997. "International Trade and Labor-Demand Elasticities," NBER Working Papers 6262, National Bureau of Economic Research, Inc.
    12. Cadot, Olivier & de Melo, Jaime, 1994. "France and the CEECs: Adjusting to Another Enlargement," CEPR Discussion Papers 1049, C.E.P.R. Discussion Papers.
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