Is the pattern of trade correlated with cross-sector differences in job turnover? Theoretically, external shocks feed through to changes in domestic employment and cross-sector differences in turnover give rise to compensating wage differentials, which feed through to output prices. Using two...

The paper explores the efficiency consequences of using temporary protection to ease adjustment following an unexpected, permanent improvement in a country's terms of trade. In the model, workers trade off the potentially higher wage that the export sector has to offer with a lower job...

It is often argued that international trade is all about long-run relationships. In this paper, we argue that this view is flawed when factor markets are characterized by turnover. Toward that end, we provide a simple dynamic model of trade with labor market turnover and show that the...