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Samuelson (1947) stated that a regular equilibrium exhibits the transfer paradox if and only if it is unstable. Gale (1974) and many in the early 1980’s debunked this equivalence by adding extra countries, reaching an anti consensus. We reinterpret Samuelson’s result as identifying the...
Persistent link: https://www.econbiz.de/10010318967
average productivity with only a muted effect on wages or margins. Owing to the exit of firms and the increase in productivity …
Persistent link: https://www.econbiz.de/10011430088
primary driving forces, sector-biased productivity growth and sectoral trade integration. We calibrate the model to the same … countries used to document our patterns. We find that sector-biased productivity growth is important for deindustrialization by …
Persistent link: https://www.econbiz.de/10013479471
Ricardian-Heckscher-Ohlin model implemented on 75 countries. We simulate two alternative productivity growth scenarios: a … balanced one in which China's productivity grows at the same rate in each sector, and an unbalanced one in which China …'s comparative disadvantage sectors catch up disproportionately faster to the world productivity frontier. Contrary to a well …
Persistent link: https://www.econbiz.de/10010352168
Employment contracts give a principal the authority to decide flexibly which task his agent should execute. However, there is a tradeoff, first pointed out by Simon (1951), between flexibility and employer moral hazard. An employment contract allows the principal to adjust the task quickly to...
Persistent link: https://www.econbiz.de/10010316905
This paper provides a theoretical rationale for non-binding retail price recommendations (RPRs) in vertical supply relations. Analyzing a bilateral manufacturer-retailer relationship with repeated trade, we show that linear relational contracts can implement the surplusmaximizing outcome. If the...
Persistent link: https://www.econbiz.de/10010315607
This paper investigates why all-inclusive travel packages are offered at some hotels but not at others. By using the theory of transaction cost, it is argued that all-inclusive contracts mitigate a hold-up problem and that the severity of this problem varies with regards to the hotel's distance...
Persistent link: https://www.econbiz.de/10013208603
As in Roemer (1982, chapter 1), this paper considers a simple international trade model and examines the existence and characterization of free trade equilibria involving the unequal exchange of labor (UE). The paper provides an almost complete characterization of the domain of economies in...
Persistent link: https://www.econbiz.de/10011788890
We show that exported products exit the US market sooner if they violate the Heckscher-Ohlin notion of comparative advantage. Crucially, this pattern is stronger when exporting country has a well-developed banking system, measured by a high ratio of bank credit over the GDP. Banks thus push...
Persistent link: https://www.econbiz.de/10013208642
"offshoring", is an important element of such a (global in scale) process of structural change having important implications for … of the labour force. This paper assesses the employment impact of offshoring, in five European countries (Germany, Spain … offshoring industries and types of professional groups affected by offshoring. Results provide a rather heterogeneous picture of …
Persistent link: https://www.econbiz.de/10011660399