Non-traded goods, firm dynamics and wages in a service economy

Eden Yu and Chi-Chur Chao

Journal of Asian Economics, 2021, vol. 76, issue C

Abstract: By considering the term-of-trade and volume-of-trade effects, Jones (2012) examines the distributive effect in a competitive economy with non-traded goods. This paper reexamines the effect in an imperfectively competitive economy with firm dynamics. A rise in foreign demand can generate revenue and also mitigate market distortion, whereas skilled-unskilled wage inequality can be magnified or mitigated via the effect on firm entry or exit. Thus, how to achieve the trade-off among growth, inequality and the environment becomes an important task for government decision-makers, especially so during the pandemic of Covid-19.

Keywords: Non-traded goods; Firm entry/exit; Wage inequality (search for similar items in EconPapers)
JEL-codes: F10 F11 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:76:y:2021:i:c:s1049007821000786

DOI: 10.1016/j.asieco.2021.101349

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