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Gravity with unemployment

Title data

Heid, Benedikt ; Larch, Mario:
Gravity with unemployment.
In: Journal of International Economics. Vol. 101 (July 2016) . - pp. 70-85.
ISSN 0022-1996
DOI: https://doi.org/10.1016/j.jinteco.2016.03.008

Official URL: Volltext

Project information

Project title:
Project's official titleProject's id
No information592405

Project financing: Deutsche Forschungsgemeinschaft

Abstract in another language

Quantifying the welfare effects of trade liberalization is a core issue in international trade. Existing frameworks assume perfect labor markets and therefore ignore the effects of aggregate employment changes for welfare. We develop a quantitative trade framework which explicitly models labor market frictions. To illustrate, we assess the effects of trade and labor market reforms for 28 OECD countries. Welfare effects of trade agreements are typically magnified when accounting for employment changes. While employment and welfare increase in most countries, some experience higher unemployment and lower welfare. Labor market reforms in one country have small positive spillover effects on trading partners.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: Welfare effects of trade; Quantitative trade theory; Unemployment; Trade costs; Structural estimation; Gravity equation
Subject classification: F14; F16; F13; F17
Institutions of the University: Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics > Lehrstuhl Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung
Faculties > Faculty of Law, Business and Economics > Department of Economics > Lehrstuhl Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung > Lehrstuhl für Volkswirtschaftslehre VI: Empirische Wirtschaftsforschung - Univ.-Prof. Dr. Mario Larch
Faculties
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences > 330 Economics
Date Deposited: 13 May 2016 07:31
Last Modified: 13 May 2016 07:31
URI: https://eref.uni-bayreuth.de/id/eprint/32374