The North-South HOS Model, inequality and globalization
No 244, Working Papers from ECINEQ, Society for the Study of Economic Inequality
The predictions from the traditional North-South HOS approach are at variance with the main characteristics of the Inequality-Globalization nexus. It is shown that by modifying this model and relaxing some of its most restrictive assumptions, it is possible to generate these characteristics. Four series of extensions are analysed: 1) divergent factor endowments between the North and the South and growing size of the South; 2) labour market rigidities resulting from a minimum wage or from the fair wage hypothesis; 3) the introduction of technological differences between countries, of technological transfers, of technological catching up and of technological biases; 4) the inserting of production segmentation and international outsourcing. Further possible extensions are also discussed. The resulting augmented North-South HOS approach provides suitable modelling of the Inequality-Globalization nexus.
Keywords: Globalisation; H-O-S; Inequality; North-South model. (search for similar items in EconPapers)
JEL-codes: D33 E24 F16 J31 (search for similar items in EconPapers)
Pages: 32 pages
New Economics Papers: this item is included in nep-int
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Chapter: The North-South HOS Model, Inequality and Globalization (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2012-244
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