Product variety, finite changes and wage inequality

Meghna Dutta, Saibal Kar () and Sugata Marjit

Economic Modelling, 2013, vol. 35, issue C, 610-613

Abstract: This paper presents a model with product variety to examine the effects of emigration and capital mobility between the North and the South on production reorganization and two-sided wage inequality. We obtain conditions under which the production patterns in both North and South undergo ‘finite changes’. Overall, the production and trade patterns may be such that the South produces and exports a homogeneous good while the North, a commodity with varieties — the result driven not by technological changes, but by factor mobility. The results further suggest that the wage inequality rises in both countries in conformity with available empirical evidence.

Keywords: Product variety; Factor mobility; Finite changes; Wage inequality; Trade patterns (search for similar items in EconPapers)
JEL-codes: F2 J31 L2 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:35:y:2013:i:c:p:610-613

DOI: 10.1016/j.econmod.2013.08.020

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