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Intra-industry trade, involuntary unemployment and macroeconomic stability

dc.contributor.authorRiche, Antoine Le
dc.contributor.authorLloyd-Braga, Teresa
dc.contributor.authorModesto, Leonor
dc.date.accessioned2021-12-13T10:04:57Z
dc.date.available2021-12-13T10:04:57Z
dc.date.issued2022-03-01
dc.description.abstractWe introduce taste for variety in a one-sector model of differentiated products with productive labor externalities, considering two OLG countries, one with wage rigidity and the other with full employment. After opening the borders to capital mobility and intra-industry trade, steady state output and real wages improve in the full employment country and the saddle path stability, characterizing this country under autarky, will prevail in the globalized world if this economy is big enough. Unemployment increases in the country with wage rigidity and, for intermediate plausible values of both the current propensity to consume and of the labor externality, indeterminacy, which emerges in the rigid wage economy in autarky, will be exported to the world if this country is relatively big. Finally, we show that globalization leads to the appearance of stable deterministic cycles in activity, employment and the trade account, both through flip and Hopf bifurcations, when the world steady state is locally determinate, for empirically plausible low degrees of labor externalities. This implies that trade cycles occur in the absence of shocks to fundamentals, and even without uncertainty in expectations.pt_PT
dc.description.versioninfo:eu-repo/semantics/acceptedVersionpt_PT
dc.identifier.doi10.1016/j.jmateco.2021.102589pt_PT
dc.identifier.eid85120088087
dc.identifier.issn0304-4068
dc.identifier.urihttp://hdl.handle.net/10400.14/36152
dc.identifier.wos000767237100006
dc.language.isoengpt_PT
dc.peerreviewedyespt_PT
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/pt_PT
dc.subjectBifurcationspt_PT
dc.subjectIndeterminacypt_PT
dc.subjectIntra-industry tradept_PT
dc.subjectInvoluntary unemploymentpt_PT
dc.subjectTaste for varietypt_PT
dc.titleIntra-industry trade, involuntary unemployment and macroeconomic stabilitypt_PT
dc.typejournal article
dspace.entity.typePublication
oaire.citation.titleJournal of Mathematical Economicspt_PT
oaire.citation.volume99
rcaap.rightsopenAccesspt_PT
rcaap.typearticlept_PT

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