This paper considers trade in an asymmetric 2x2x2 world, the two countries being labelled America and Europe. In America, the labor market is perfectly competitive, with flexible wages ensuring full employment. Europe faces unemployment due to efficiency wages. We derive the conditions for there...

We set up a general equilibrium model with heterogeneous firms to study the interaction between wage bargaining and foreign direct investment. Thereby, we highlight the incentives of firms to invest abroad in order to improve their bargaining position vis-á-vis local unions and we show how...

In this paper we set up a simple theoretical framework to study thepossible source country effects of skilled labor emigration fromdeveloping countries. We show that for given technologies, labor marketintegration necessarily lowers GDP per capita in a poor source countryof emigration, because...

In this paper we set up a simple theoretical framework to study the possible source country effects of skilled labor emigration. We show that for given technologies, labor market integration necessarily lowers GDP per capita in a poor source country of emigration, because it distorts the...