Optimal Domestic Regulation and the Pattern of Trade (original) (raw)

International Trade with Domestic Regulation under Asymmetric Information: A Simple General Equilibrium Approach

The RAND Journal of Economics

[eng] We present a two-sided search model where agents differ by their human capital endowment and where workers of different skill are imperfect substitutes. Then the labor market endogenously divides into disjoint segments and wage inequality will depend on the degree of labor market segmentation. The most important results are : 1) overall wage inequality as well as within-group and between-group inequalities increase with relative human capital inequality ; 2) within-group wage inequality decreases while between-group and overall wage inequalities increase with the efficiency of the search process ; 3) within-group, between-group and overall wage inequalities increase with technological changes. [fre] Immigration et justice sociale. . Cet article est d�di� � la m�moire d'Yves Younes qui nous a quitt�s en mai 1996, et dont les derni�res r�flexions sur l'importance du ph�nom�ne migratoire dans les �tats-Unis des ann�es 1980-1790 m'ont beaucoup influenc�.. L'ouvertu...

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Information Globalization, Risk Sharing, and International Trade

Information frictions are often invoked to explain low levels of international trade beyond those that measured trade frictions (tari ffs, transportation costs, etc.) can explain. But to explain why international trade is lower then domestic trade, home firms have to know something that foreigners do not. Without information asymmetry, domestic trade and foreign trade would be inhibited equally. This paper incorporates a simple information asymmetry in a standard, two-country Armington trade model and studies its eff ect on international risk sharing and trade flows. We fi nd that ameliorating information asymmetry { information globalization { reduces trade and international risk sharing. In other words, asymmetric information frictions behave in the opposite manner as a standard trade cost.

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Optimal Domestic Regulation and the Pattern of Trade (original) (raw)

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