Helpman, Elhanan; Itskhoki, Oleg - C.E.P.R. Discussion Papers - 2009
We study a two-country two-sector model of international trade in which one sector produces homogeneous products while … vacancies, firing costs, and unemployment benefits. We study the interaction of labor market rigidities and trade impediments in … shaping welfare, trade flows, productivity, and unemployment. We show that both countries gain from trade but that the …