We develop a framework for studying how differences in the level and/or dispersion of per-capita income affect trade structure and welfare in a two-country model. Thereby, we embed nonhomothetic preferences into a home-market model with two sectors of production and one input factor. We...

This paper sets up a general oligopolistic equilibrium model with unionized labor markets. By accounting for productivity differences, the model features profit and wage differentials across industries. We use this setting to study the impact of trade liberalization on employment, welfare, and...

In recent decades, many countries experienced both a rise in top income shares and an increase of income inequality among the top earners. In this paper, I study the role of international trade as a catalyst for this development and analyze the associated welfare effects. I build a simple...

This paper sets up a general oligopolistic equilibrium model with multi-product firms and union wage setting in a subset of industries. By claiming a wage premium, labor unions enforce a decline in firm scale and scope and thus dampen industrial output, with negative feedback effects on the...

The scarcity of talent is a tremendous challenge for firms in the globalized world. This paper investigates the role of labor market imperfection in open economies for the usage of talent in the production process of firms. For this purpose, I set up a heterogeneous firms model, where production...

This paper analyzes competition for capital between welfare-maximizing governments in a framework with agglomeration tendencies and asymmetric unionization. We find that a unionized country's government finds it optimal to use tax policy to induce industry to relocate towards a location with a...

We set up a trade model with two countries, two sectors, and one production factor, which features a home-market effect due to the existence of trade costs. We consider search frictions and firm-level wage bargaining in the sector producing differentiated goods and a perfectly competitive labor...

Replicator dynamic modelling (rdm) is used to discuss industrial evolution problems with heterogeneous agents. However, some of the models tend to be very complex and, therefore, analytical solutions cannot be obtained. Hence, the paper proposes to start with a relatively simple model and check...

In this paper, I relax the common assumption of the one-dimensionality of noise made in the standard competitive noisy rational expectations framework. Within an environment characterized by multidimensional noise, I explore the strategic interactions between different traders that are informed...

Do all types of information benefit the efficiency of prices in the sense that they drive them closer to fundamentals compared to the situation where information does not exist? Looking at the competitive noisy rational expectations framework, the clear answer of the literature is: yes. It...