Labour Market Imperfection and HOS Model: Some Counterintuitive Results

Chaudhuri, Sarbajit (2009): Labour Market Imperfection and HOS Model: Some Counterintuitive Results.

Abstract

This note introduces labour market imperfection in an otherwise Heckscher-Ohlin-Samuelson (HOS) model and provides a theory of unionized wage formation. It demonstrates that this framework satisfies the Stolper-Samuelson theorem and the magnification effect and that it is capable of producing certain results which are contrary to the standard HOS and the Corden and Findlay (1975) results.

• Item Type: MPRA Paper
• Language: English
• Keywords: Labour market imperfection, Heckscher-Ohlin-Samuelson model, Corden and Findlay model, Foreign capital, Trade liberalization.
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors ; Shadow Economy ; Institutional Arrangements; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements

References

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Harris, J. R. and Todaro, M. (1970): ‘Migration, unemployment, and development: a two-sector analysis’, American Economic Review 60, 126-142.