This paper analyzes the coexistence of on-the-job (general) training and on-the-job search in a frictional labor market where firms post skill-dependent labor contracts to preemptively back-load compensation after training. The back-loaded compensation scheme discourages trained workers'...

Purpose – Unlike the common belief in the so-called ‘trickle-down effect,' trade-induced output growth in a small open economy does not necessarily improve the domestic welfare of the economy. This paper analyzes the conditions under which the trickle-down effect does not work properly such...

This paper studies how and to what extent labor market friction affects individuals' schooling decisions. High job-finding rates and low job separation rates encourage schooling investment by extending the expected duration for exploiting the accumulated human capital. High job-to-job transition...

This paper examines how the welfare implication of the "most-favored-nation" (MFN) principle has changed as the trade agreement mode has shifted from the "one-shot-multilateral-trade-agreement" to "sequential-bilateral-trade-agreements.'' In particular, it emphasizes that the MFN principle works...

It is well-known that the Pigouvian taxation scheme and emission trading scheme (delegating the emission pricing authority to the market mechanism) offer equivalent incentives to reduce emissions in various autarky settings. In contrast, we demonstrate that in a globalized economy with...