King, Ian; Stähler, Frank - In: Canadian Journal of Economics 47 (2014) 2, pp. 580-604
We develop an open economy general equilibrium model, with auctionbased directed search unemployment, to study the interactions of trade and unemployment. The theory ascribes all outcomes purely to the fundamentals of technology and endowment. If countries differ by <i>endowment</i>, trade makes both...