Country | |
Publisher | |
ISBN | 9788932242781 |
Format | PaperBack |
Language | English |
Year of Publication | 2018 |
Bib. Info | 50p. |
Product Weight | 150 gms. |
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This paper emphasizes the role of labor market frictions, which is largely neglected in quantitative trade models that usually assume full-employment. Labor market frictions can contribute to a source of comparative advantage, thus affecting trade share, price, expenditure, etc. Unemployment and changes in unemployment rates play a key role in the calculation of changes in welfare. This paper highlights that quantitative trade models with full-employment can provide biased welfare effects from tariff changes relative to the present model with labor market frictions.