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Terms of trade shocks and endogenous search unemployment: A two-sector model with non-traded goods

Xu, Xinpeng; Sheng, Yu

Description

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]

dc.contributor.authorXu, Xinpeng
dc.contributor.authorSheng, Yu
dc.date.accessioned2015-12-10T23:36:42Z
dc.identifier.issn1361-374X
dc.identifier.urihttp://hdl.handle.net/1885/70258
dc.description.abstractWe 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) unemployment rates in both traded and non-traded sectors.
dc.publisherBlackwell Publishing Ltd
dc.sourcePacific Economic Review
dc.titleTerms of trade shocks and endogenous search unemployment: A two-sector model with non-traded goods
dc.typeJournal article
local.description.notesImported from ARIES
local.identifier.citationvolume19
dc.date.issued2014
local.identifier.absfor140211 - Labour Economics
local.identifier.ariespublicationU3488905xPUB2269
local.type.statusPublished Version
local.contributor.affiliationXu, Xinpeng, Hong Kong Polytechnic University
local.contributor.affiliationSheng, Yu, College of Asia and the Pacific, ANU
local.description.embargo2037-12-31
local.bibliographicCitation.issue2
local.bibliographicCitation.startpage201
local.bibliographicCitation.lastpage215
local.identifier.doi10.1111/1468-0106.12060
dc.date.updated2015-12-10T11:56:07Z
local.identifier.scopusID2-s2.0-84899550320
local.identifier.thomsonID000335000900004
CollectionsANU Research Publications

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