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Industrial Specialization, Trade, and Labour Market Dynamics in a Multisectoral Model of Technological Progress

Author

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  • Robert Stehrer

    () (The Vienna Institute for International Economic Studies, wiiw)

Abstract

The issue of the impact of trade on economic performance and labour markets has been intensively discussed in the recent literature on trade liberalization and globalization where the debate was mainly about identifying the relative impact of trade and technology. The bulk of the existing literature in this area employs almost without exception a static Heckscher-Ohlin framework which seems not to be a suitable tool for analysing the ongoing dynamics. This paper presents a dynamic multi-sectoral framework with heterogenous labour to explore the issue of trade liberalization and sectoral catching-up in productivity levels. The model is basically an input-output framework with Schumpeterian features; the latter are modelled as the impact of transitory rents which result from uneven productivity growth and technological catching-up upon the price and quantity systems of the trading economies. Relative productivity and wage rate dynamics across sectors determine the comparative costs and the dynamics of trade specialization. In the appendix the equilibrium solutions of the model are derived.

Suggested Citation

  • Robert Stehrer, 2001. "Industrial Specialization, Trade, and Labour Market Dynamics in a Multisectoral Model of Technological Progress," wiiw Working Papers 15, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:wpaper:15
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    Cited by:

    1. Friedrich Schneider & Alexander F. Wagner & Mathias Dufour, 2003. "Satisfaction not guaranteed-Institutions and satisfaction with democracy in Western Europe," Economics working papers 2003-03, Department of Economics, Johannes Kepler University Linz, Austria.
    2. Bart Los, 2004. "Identification of strategic industries: A dynamic perspective," Economics of Governance, Springer, vol. 83(4), pages 669-698, October.
    3. Friedrich Schneider & Alexander F. Wagner, 2003. "Tradeable permits - Ten key design issues," Economics working papers 2003-04, Department of Economics, Johannes Kepler University Linz, Austria.
    4. Friedrich Schneider & Kausik Chaudhuri & Sumana Chatterjee, 2003. "The Size and Development of the Indian Shadow Economy and a Comparison with other 18 Asian Countries: An Empirical Investigation," Economics working papers 2003-02, Department of Economics, Johannes Kepler University Linz, Austria.

    More about this item

    Keywords

    trade liberalization; economic integration; labour markets; simulation; economic dynamics; growth;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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