Labor Market Frictions as a Source of Comparative Advantage, with Implications for Unemployment and Inequality
20 Pages Posted: 22 Feb 2010 Last revised: 30 Jul 2010
Date Written: February 2010
Recent research has emphasized firm heterogeneity as a source of comparative advantage. Combining this approach with labor market frictions and worker heterogeneity provides a framework for studying the impact of trade on unemployment and inequality. This paper reviews this approach and reports a number of results from recent studies.
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