Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86574
Authors: 
Francois, Joseph
Grier, Kevin
Nelson, Douglas
Year of Publication: 
2004
Series/Report no.: 
Tinbergen Institute Discussion Paper 04-021/2
Abstract: 
We depart from the trade and wages literature and its emphasis on North-South trade, examining North-North by developing the basic linkages between trade-based integration and relative wages in an Ethier-type division of labor model. Using this model we identify a formal relationship between international trade, productivity, and wages. We then examine the trivariate relationship between trade, growth in total factor productivity (TFP), and the skill premium in a vector autoregression framework. We find evidence of a long-run relationship between growth in intermediate goods and changes in TFP. Controlling for this relationship we also find a positive relationship between trade and the skill-premium.
Subjects: 
trade and wages
globalization
division of labor
monopolistic competition
intra-industry trade
JEL: 
F16
F12
Document Type: 
Working Paper

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