Trade, technology and labour markets in the world economy, 1970-90: A computable general equilibrium analysis

A. Patrick Minford, Jonathan Riley and Eric Nowell

Journal of Development Studies, 1997, vol. 34, issue 2, 1-34

Abstract: Whether the plight of OECD unskilled labour is due to trade or technology is examined with a general equilibrium Heckscher-Ohlin calibrated model of North and South. Technology transfer from North to South via direct foreign investment in unskilled-labour-intensive manufacturing industries is identified as the trade shock. Simulations are carried out for this and other relevant shocks, and compared with the facts of the 1970-90 period. Weights on the shocks are selected by least squares. It is found that the roles of trade and technology in the plight of Northern unskilled labour are roughly equal.

Date: 1997
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DOI: 10.1080/00220389708422510

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