The paper develops a tractable way to incorporate the micro structure of dual models of international trade into a standard class of dynamic open-economy macro models. In the process, it develops the concept of a dynamic factor price equalization set and an integrated intertemporal equilibrium....

"Der Beitrag behandelt im Schwerpunkt die schätztheoretische Problematik bei der Erklärung von Veränderungen der Beschäftigungsschwelle des Wirtschaftswachstums, die durch die Spezifikation bedingt ist. Es wird nachgewiesen, daß neben technischen Fortschritt, Skaleneffekt i.a. auch der...

We examine the trajectories of the real unit labour costs (RULCs) in a selection of Eurozone economies. Strong asymmetries in the convergence process of the RULCs and its components —real wages, capital intensity, and technology— are uncovered through decomposition and cluster analyses. In...

We examine the trajectories of the real unit labour costs (RULCs) in a selection of Eurozone economies. Strong asymmetries in the convergence process of the RULCs and its components – real wages, capital intensity, and technology – are uncovered through decomposition and cluster analyses. In...

Based on a two-country model it is scrutinized how the structure of the unemployment benefit system affects the consequences of idiosyncratic labor market shocks on real wages and unemployment in other countries. International spillover effects are caused by changes in world real income. The...

With global supply chains, any value added or production task can be traded as part of goods. This means that competitiveness can be measured either in terms of “tasks” (Bems and Johnson, 2012), or goods, but with goods prices reflecting the cost of tasks embedded in those goods. We show...

As critical piece of China’s gradualist economic transition, domestic price reform still faces major challenges. In particular, factor price, which is still tightly-controlled and not market-based, is lower than market equilibrium price. Factor price distortion not only reduces market...

We introduce non-tradable goods to the Heckscher-Ohlin-Samuelson (HOS) model to study the distributive effects of terms of trade shocks. We show that the employment of resources in activities producing exclusively for the local market induces a crucial association between domestic spending and...

The staff report for the 2005 Article IV Consultation on the People’s Republic of China highlights economic developments and fiscal policy. The continued robust growth owes much to the favorable external environment, with judicious macroeconomic policies, continued structural reforms, and...

This paper focuses on the trade-off faced by governments in deciding the allocation of public expenditures between productivity-enhancing public infrastructures and utility-enhancing public consumption. From the modeling point of view, the paper augments a standard New Open Economy...