Egger, Peter; Greenaway, David; Seidel, Tobias - In: Canadian Journal of Economics 44 (2011) 2, pp. 509-540
We develop a multi-country model with imperfect labour markets to study the effect of labour market frictions on bilateral trade flows. We use a framework that allows for goods trade and capital mobility and show that labour market imperfections exert opposite effects in the absence of capital...