U.S. Production Technology And The Effects Of Imports On The Demand For Primary Factors

Christis Tombazos ()

The Review of Economics and Statistics, 1998, vol. 80, issue 3, 480-483

Abstract: We employ a unit cost function, in the context of the production theory approach, to estimate the Allen-Uzawa effect of various categories of imports on U.S. primary factors. To circumvent curvature-related problems, often associated with similar studies that do not invoke separability, we combine the global imposition of concavity with a symmetric normalized quadratic representation of the unit cost function (which remains flexible after curvature enforcing reparameterizations). Challenging conventional wisdom, we find that the positive, downstream-production-related, employment effects of the majority of imports are significant enough to produce a detectable net increase in labor demand. © 1998 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Date: 1998
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