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Revisiting the Commodity Curse : A Financial Perspective
Alberola, Enrique - 2017
We study the response of a three-sector commodity-exporter small open economy to a commodity price boom. When the economy has access to international borrowing and lending, a temporary commodity price boom brings about the standard wealth effect that stimulates demand and has long-run...
Persistent link: https://www.econbiz.de/10012962189
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Trade and Minimum Wages in General Equilibrium : Theory and Evidence
Bai, Xue - 2018
Do minimum wages affect economic outcomes beyond low-skill employment? This paper develops a new model with heterogeneous firms under perfect competition in a Heckscher-Ohlin setting to show that a binding minimum wage raises product prices, encourages substitution away from labor, and creates...
Persistent link: https://www.econbiz.de/10012922983
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Pegs, Downward Wage Rigidity, and Unemployment : The Role of Financial Structure
Schmitt-Grohé, Stephanie - 2012
This paper studies the relationship between financial structure and the welfare consequences of fixed exchange rate regimes in small open emerging economies with downward nominal wage rigidity. The paper presents two surprising results. First, a pegging economy might be better off with a closed...
Persistent link: https://www.econbiz.de/10013103809
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Unemployment and Environmental Regulation in General Equilibrium
Hafstead, Marc A. C. - 2016
This paper analyzes the effects of environmental policy on employment (and unemployment) using a new general-equilibrium two-sector search model. We find that imposing a pollution tax causes substantial reductions in employment in the regulated (polluting) industry, but this is offset by...
Persistent link: https://www.econbiz.de/10012991682
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Offshoring and Unemployment
Mitra, Devashish - 2007
In this paper, in order to study the impact of offshoring on sectoral and economywide rates of unemployment, we construct a two sector general equilibrium model in which labor is mobile across the two sectors, and unemployment is caused by search frictions. We find that, contrary to general...
Persistent link: https://www.econbiz.de/10012776810
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Efficiency Wages, Unemployment, and Environmental Policy
Heutel, Garth; Zhang, Xin - 2022
We study the incidence of pollution taxes and their impact on unemployment in an analytical general equilibrium efficiency wage model. We find closed-form solutions for the effect of a pollution tax on unemployment, factor prices, and output prices, and we identify and isolate different channels...
Persistent link: https://www.econbiz.de/10014091901
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Unskilled Migration : A Burden or a Boon for the Welfare State
Razin, Assaf; Sadka, Efraim - 2021
In a static setup, migration of unskilled labor may be resisted by the entire native-born population because, being relatively low earners, migrants are net beneficiaries of the fiscal system. However, the paper shows that with a pay-as-you-go pension, an important pillar of the welfare state,...
Persistent link: https://www.econbiz.de/10013244737
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Trends and Cycles in Small Open Economies : Making the Case for a General Equilibrium Approach
Chen, Kan - 2016
Economic research into the causes of business cycles in small open economies is almost always undertaken using a partial equilibrium model. This approach is characterized by two key assumptions. The first is that the world interest rate is unaffected by economic developments in the small open...
Persistent link: https://www.econbiz.de/10012985959
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Contingent Protection as Better Insurance
Prusa, Thomas J.; Fischer, Ronald D. - 2021
We formalize the notion that GATT exceptions such as antidumping and escape clause actions can act as insurance for import competing sectors affected by adverse price shocks. We use a general equilibrium model with several import competing sectors and assume incomplete markets so that agents...
Persistent link: https://www.econbiz.de/10013223874
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Trade, Diffusion and the Gains from Openness
Rodríguez-Clare, Andrés - 2012
Building on Eaton and Kortum's (2002) model of Ricardian trade, Alvarez and Lucas (2005) calculate that a small country … representing 1% of the world's GDP experiences a gain of 41% as it goes from autarky to frictionless trade with the rest of the … world. But the gains from openness, which includes not only trade but all the other ways through which countries interact …
Persistent link: https://www.econbiz.de/10012755278