Skill acquisition, credit constraints, and trade
In this paper we develop a general equilibrium model where credit constraints limit the ability of agents with heterogeneous abilities and wealth to acquire skills. We identify a new effect, the induced Rybczynski effect, that works in the opposite direction from the normal supply response and may result in relative supply being downward-sloping. We analyze the effects of trade and show that under some conditions trade may reduce welfare. Finally, we study the effects of trade on income distribution and inequality.
Year of publication: |
2009
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Authors: | Chesnokova, Tatyana ; Krishna, Kala |
Published in: |
International Review of Economics & Finance. - Elsevier, ISSN 1059-0560. - Vol. 18.2009, 2, p. 227-238
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Publisher: |
Elsevier |
Subject: | Credit constraint Skill formation |
Saved in:
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