Joseph Francois, D. Nelson, Kevin Grier,
"Globalization, Roundaboutness, and Relative Wages"
, in Tinbergen Institute Discussion Papers, Nummer 04-021/2, Tinbergen Institute, 2004
Globalization, Roundaboutness, and Relative Wages
Sprache des Titels:
We depart from the trade and wages literature and its emphasis on North-South trade, examining North-North by developing the basic linkages between trade-based integration and relative wages in an Ethier-type division of labor model. Using this model we identify a formal relationship between international trade, productivity, and wages. We then examine the trivariate relationship between trade, growth in total factor productivity (TFP), and the skill premium in a vector autoregression framework. We find evidence of a long-run relationship between growth in intermediate goods and changes in TFP. Controlling for this relationship we also find a positive relationship between trade and the skill-premium.