Barbier-Gauchard, Amélie; Palma, Francesco De; Diana, … - Bureau d'Économie Théorique et Appliquée (BETA), … - 2012
In this paper, we assume a world of two countries in a fixed exchange rate system. The main difference between the two countries lies in the features of their labor markets. In the home country, we assume the existence of a dual labor market, with formal and informal sectors. In the foreign...