Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
963270 | Journal of International Economics | 2006 | 19 Pages |
Abstract
This paper analyzes the effects of global and national technological change on employment and relative wages in an integrated two-country world (“Europe” and “America”), where both countries are characterized by equilibrium unemployment due to fair wage constraints. The asymmetry between the countries arises from country-specific preferences towards wage inequality, with Europe's preferences being more egalitarian. Furthermore, we look at integration between this two-country world and a third country (“low-wage south”). We derive an analytical tool, the Virtual Integrated Equilibrium, that allows us to adapt Dixit and Norman's Integrated Equilibrium approach to a situation where both countries have endogenous unemployment levels.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Udo Kreickemeier, Douglas Nelson,