Terms of trade shocks and endogenous search unemployment: A two-sector model with non-traded goods
We develop a simple and tractable two-sector search model featuring a non-traded sector and endogenous search unemployment to examine the impact of terms of trade shocks on unemployment. We show that changes in terms of trade will not only lead to employment reallocation across sectors, as in the traditional trade models, but, more importantly, impact upon search unemployment within each sector. Specifically, we show that an improvement (deterioration) of terms of trade reduces (increases)...[Show more]
|Collections||ANU Research Publications|
|Source:||Pacific Economic Review|
|01_Xu_Terms_of_trade_shocks_and_2014.pdf||261.27 kB||Adobe PDF||Request a copy|
Items in Open Research are protected by copyright, with all rights reserved, unless otherwise indicated.