Creative destruction and unemployment in an open economy model

Ignat Stepanok

No 1820, Kiel Working Papers from Kiel Institute for the World Economy

Abstract: I develop a model of endogenous economic growth and search and matching frictions in the labor market. I study the effect of trade liberalization between two identical economies on unemployment. I solve for two versions of the growth model, the first one where trade liberalization has only a temporary effect on growth, a semi-endogenous growth model. In the second version trade liberalization has a permanent effect on growth, a fully endogenous growth model. I show that in both versions trade liberalization has a steady state effect on unemployment that can be either negative or positive depending on parameters.

Keywords: creative destruction; unemployment; trade liberalization (search for similar items in EconPapers)
JEL-codes: F16 J63 O41 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Creative destruction and unemployment in an open economy model (2016)
Journal Article: Creative destruction and unemployment in an open economy model (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1820

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