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Title: |
International Trade and the Equilibrium Rate of Unemployment in a
Heckscher-Ohlin World Economy |
| Author: |
Hoon, Hian Teck |
| Author
Affiliation: |
National U of
Singapore |
| Source: |
International Economic Journal, Summer 1994, v. 8, no. 2, pp. 13-32 |
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Publication Date: |
Summer 1994 |
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Abstract: |
This paper develops a (stylized
Asia-American) Heckscher-Ohlin world economy in which the equilibrium
rate of unemployment is endogenous. We examine the impact of various
economic shocks on unemployment in the global economy. Harrod-neutral or
Hicks-neutral technical progress across all industries in Asia leads to
a terms of trade improvement for America but raises America's
unemployment rate. Introducing a third country such as the block of
former socialist economies results in higher unemployment for both Asia
and America. Protection in America lowers American equilibrium
unemployment but raises Asia's unemployment. |
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