Authors:

  • Elhanan Helpman

Excerpt

The Dynamic Adjustment of Firms and Workers to Foreign Trade. Elhanan Helpman, August 17, 2014, Paper. "Adjustment to trade liberalization is associated with substantial reallocation of labor across firms within sectors. This salient feature of the data is well captured by models of international trade with heterogenous firms. In this paper we reconsider the adjustment of firms and workers to changes in trade costs, explicitly accounting for labor market frictions and the entire adjustment path from an initial to a final steady-state. The transitional dynamics that emerge in this framework exhibit rich patterns..." Link