Skill acquisition, credit constraints, and trade

Tatyana Chesnokova () and Kala Krishna ()

International Review of Economics & Finance, 2009, vol. 18, issue 2, 227-238

Abstract: In this paper we develop a general equilibrium model where credit constraints limit the ability of agents with heterogeneous abilities and wealth to acquire skills. We identify a new effect, the induced Rybczynski effect, that works in the opposite direction from the normal supply response and may result in relative supply being downward-sloping. We analyze the effects of trade and show that under some conditions trade may reduce welfare. Finally, we study the effects of trade on income distribution and inequality.

Keywords: Credit; constraint; Skill; formation (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (12)

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Working Paper: Skill Acquisition, Credit Constraints, and Trade (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:18:y:2009:i:2:p:227-238

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