 Marginal Intraindustry Trade and Labor AdjustmentMary E. Lovely and Douglas Nelson Review of International Economics, 2000, vol. 8, issue 3, 436-447 Abstract: In the context of Ethier’s model of the division of labor, this paper accomplishes three tasks. First, it complements existing literature on the algebraic properties of marginal intraindustry trade (MIIT) measures by embedding one of these measures in a general equilbrium model. Consistent with the existing literature, it is found that change in the Grubel–Lloyd index provides systematically different economic information from change in the MIIT index. Second, it examines the connection between intraindustry trade and intra‐ industry adjustment. Here it is found that the informal assumption that intraindustry trade generates only intraindustry adjustment cannot be sustained. That is, intraindustry trade will generally induce interindustry adjustment. Finally, because intraindustry trade generates interindustry adjustment, increased intraindustry trade will generally induce long‐run changes in relative factor prices. This suggests, given the prominence of intraindustry trade in OECD countries, that there may be problems with inference on the link between rade and wages undertaken in a strict Heckscher–Ohlin framework. Date: 2000 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:reviec:v:8:y:2000:i:3:p:436-447 Ordering information: This journal article can be ordered from Access Statistics for this article Review of International Economics is currently edited by E. Kwan Choi More articles in Review of International Economics from Wiley Blackwell |
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