Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/104877 
Year of Publication: 
1998
Series/Report no.: 
Tübinger Diskussionsbeiträge No. 122
Publisher: 
Eberhard Karls Universität Tübingen, Wirtschaftswissenschaftliche Fakultät, Tübingen
Abstract: 
Based on the factor price frontier, we investigate the effects of supply shocks ort labour markets in open economies. Two different supply shocks are considered: an oil price shock, and the integration of relatively labour-abundant countries into the world economy. With flexible wages, a negative supply shock leads to a decrease in the wage rate while employment remains constant. With a rigid wage rate, a rise in unemployment of unskilled labour follows. The model explains the shift of relative labour demand towards skilled labour. The theoretical results are confirmed by our estimation of the factor price frontier for the United States and Germany.
JEL: 
E24
F21
Document Type: 
Working Paper

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