In this paper, we present a simple but rigorous model of the dynamics of output and Unemployment in transition. We consider a worker-entrepreneur, who is 'locked in' to her current production technique, with a choice of continuing to work with it or search for a better technique. If she succeeds...

Despite its exclusion from the Doha agenda, the issue of labor standards remains anintensely discussed subject among economists, policymakers, international agencies and nongovernmental organizations. In the past few years, both World Trade Organization (WTO) and International Labor Organization...

This paper considers the generalized second-best analytics of optimal restructuring under a political constraint, building on the modeling approach in Dehejia (1997). It is shown that the second-best optimum entails administering the terms of trade shock fully at the initiation of the reform,...