We introduce search unemployment à la Pissarides into Melitz' (2003) model of trade with heterogeneous firms. We allow wages to be individually or collectively bargained and analytically solve for the equilibrium. We find that the selection effect of trade influences labor market outcomes....

In theoretical trade models with variable markups and collective wage bargaining, export exposure may reduce the exporter wage premium. We test this prediction using linked German employer-employee data from 1996 to 2007. To separate the rent-sharing mechanism from assortative matching, we...

This paper analyzes the effect of Product Market Regulation (PMR) on unemployment in a search model with heterogeneous multiple-worker firms. In our setup, PMR modifies the distribution of firm productivities, thereby affecting the equilibrium rate of unemployment. We distinguish between PMR...

Increasing wage inequality between similar workers plays an important role for overall inequality trends in industrialized societies. To analyze this pattern, we incorporate directed labor market search into a dynamic model of international trade with heterogeneous firms and homogeneous workers....

The papers in this Special Issue focus on real and financial integration in Asia. The papers were presented at a workshop organized by the FernUniversität Hagen. We discuss core results and discuss potential policy implications related to monetary policy in China and the integration of Asia in...

This paper presents an analysis of the effects of non-pharmaceutical interventions on countries' bilateral trade with China. Our panel regression results suggest a reduction in monthly Chinese exports to countries that introduced more stringent lockdown measures. We extend our analysis by...

This paper proposes a multi-industry trade model with integrated capital and goods markets. Labor market imperfections in line with Mortensen and Pissarides (Job Creation and Job Destruction in the Theory of Unemployment, 1994) give rise to unemployment and a channel for the government to...

In theoretical trade models with variable markups and collective wage bargaining, exportexposure may reduce the exporter wage premium. We test this prediction using linkedGerman employer-employee data from 1996 to 2007. To separate the rent-sharingmechanism from assortative matching, we exploit...

This paper proposes a simple multi-industry trade model with search frictions in the labor market. It will be shown that the reallocation of capital across countries in formof FDI leads to changes in unemployment at the extensive and intensive industry margins. Whether a country benefits from...

This paper proposes a multi-industry trade model with integrated capital markets and Mortensen and Pissarides search frictions in the labor market. Institutional changes in the model trigger adjustments at the intensive and extensive margin of labor demand. At the extensive margin a shift of the...