The welfare effects of trade integration with endogenous production technology are examined in a monopolistic competition framework. In addition to explaining industry location, trade patterns and accompanying effects on local welfare, the analysis highlights the endogenous change in the costs...

Traditional Heckscher-Ohlin reasoning predicts that in open economies sector bias of technical change determines wages and may induce firms to lower skill ratios. Skill bias plays a minor role – at best. The paper discusses sufficient conditions for skill bias of ICT nevertheless to be a major...

Previous studies were plagued with considerable problems when interpreting and empirically analysing Wagner's Law. Therefore, we initially present some kind of "pure theory of government's share" for a two-person society based on the pure theory of public and private goods as originally...

Starting from the secular fact of an increasing government's share, a retrospective on Adolph Wagner's writings seems worthwhile. A leading German economist of the Bismarck era, he first formulated the famous "law of increasing state activity" for industrializing nations. After analyzing his way...

We examine whether the Samuelsonian definition of public goods can be reconciled with "Wagner's Law", that is, public expenditures outpacing economic growth. While both predominantly focus on the demand-side, they differ with respect to their socio-political foundations. Taking the latter into...

This paper examines the linkage between trade and the dismal state of labour markets in Europe. On the face of superficial evidence, the nexus is weak and is overshadowed by more compelling evidence of skill-biased technical change. Yet a complete dismissal of globalization is inconsistent with...

This paper proposes a model in which the removal of barriers to trade and factor mobility is associated with endogenous fragmentation of the value-added chain. Fragmentation is the outcome of cost competition--the profit-maximizing choice of cost structure by monopolistically competitive firms....

There has been an intense debate as to the effects of offshoring and global value chains on labor, with the debate centering around possible negative employment and income effects for the low(er) skilled in advanced economies. Although sociological and psychological research has shown that...