A many-country, many-good model of labor market rigidities as a source of comparative advantage
We extend the theoretical framework in Cuñat and Melitz (2007) to a many-country setup where countries exhibit different degrees of labor market flexibility. We rely on the insights from a recent paper by Costinot (2009) to obtain precise predictions about comparative advantage in this setting: countries with more flexible labor markets specialize in more volatile industries.
- Author(s)
- Alejandro Cunat, Marc Melitz
- Year of publication
- May, 2010
- Journal
- Journal of the European Economic Association
- Volume, Number
- 8, 2-3
- Pages
- 434-441
- Language
- English