Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/141661
Authors: 
Lechthaler, Wolfgang
Mileva, Mariya
Year of Publication: 
2016
Series/Report no.: 
Kiel Working Paper 2041
Abstract: 
Motivated by the increased importance of trade between industrialized and less-developed countries, we build a DSGE model featuring comparative advantage and inter-industry trade to analyze business cycle dynamics of industrialized countries. We show that productivity shocks lead to shifts in the relative demand of exporting and import-competing sectors, implying an important role for the mobility of workers across sectors. If workers are very mobile, then the aggregate implications of the two-sector model are similar to a one-sector model. If workers are very immobile, then the two-sector model features smaller responses in GDP to domestic shocks but larger responses to foreign shocks, implying larger comovement of GDP across countries.
Subjects: 
international business cycles
inter-industry trade
comparative advantage
wage inequality
JEL: 
E20
E25
F41
F44
F62
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.