This paper examines the effects of Hong Kong-mainland China trade on the wage inequality in Hong Kong. Because of the large volume of trade and the large income disparity between these two regions, this empirical study provides a good test of the theories on North-South trade. The econometric...

This paper provides a model of involuntary unemployment by combining the insights of the sticky wage theory and the efficiency wage theory. It implies that employed workers tend to supply more effort in response to economic downturns. Thus, a negative shock to an economy has intriguing impacts...