Do Excessive Wage Increases Raise Imports? Theory and Evidence
This paper uses a model of trade in vertically differentiated products to examine the effects of "excessive wage" increases (i.e. above productivity) on the volume of commodity imports. The model predicts that for commodities, in which the country has comparative advantage in high quality varieties, an increase in "excessive wages" may result in a decrease in the volume of imports. The empirical validity of the model's predictions is demonstrated with the use of disaggregated Japanese import data for the period 1967-95. We also find that the aggregate volume of Japanese imports is not responsive to "excessive wage" changes.
Authors: | Malley, Jim ; Moutos, Thomas |
---|---|
Institutions: | Department of Economics, Adam Smith Business School |
Saved in:
freely available
Saved in favorites
Similar items by subject
-
The Synchronization of GDP Growth in the G7 during U.S. Recessions. Is this Time Different?
Antonakakis, Nikolaos, (2010)
-
The Synchronization of GDP Growth in the G7 during U.S. Recessions. Is this Time Different?
Antonakakis, Nikolaos, (2010)
-
Asymmetric cointegration between exchange rate and trade balance in Nigeria
Aliyu, Alhaji Jibrilla, (2015)
- More ...
Similar items by person