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Trade and Wages When the Trade Regime is Determined Endogenously

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  • Robin Naylor

Abstract

The paper shows that whether trade is one‐way or two‐way depends on wage strategies adopted by trade unions. The union’s wage strategy choices themselves depend upon the conditions under which trade takes place, as well as upon the characteristics of both the labor and the product markets in the trading countries. Thus, trade and labor market outcomes are determined endogenously. Testable hypotheses are generated, and the implications of the theoretical model for the econometric analysis of trade and wages are discussed.

Suggested Citation

  • Robin Naylor, 2000. "Trade and Wages When the Trade Regime is Determined Endogenously," Review of International Economics, Wiley Blackwell, vol. 8(3), pages 556-565, August.
    • Handle: RePEc:bla:reviec:v:8:y:2000:i:3:p:556-565
    DOI: 10.1111/1467-9396.00241
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    Cited by:

    1. Andersen, Torben M. & Sørensen, Allan, 2007. "Product Market Integration and Labour Markets: Aggregate Gains at the Cost of More Inequality?," IZA Discussion Papers 2556, Institute of Labor Economics (IZA).
    2. Catia Montagna & Antonella Nocco, 2013. "Unionization, international integration, and selection," Canadian Journal of Economics, Canadian Economics Association, vol. 46(1), pages 23-45, February.
    3. Emanuele Bacchiega & Antonio Minniti, 2015. "Training and Product Quality in Unionized Oligopolies," Economica, London School of Economics and Political Science, vol. 82, pages 1261-1301, December.
    4. Bhattarai, Keshab & Mallick, Sushanta, 2013. "Impact of China's currency valuation and labour cost on the US in a trade and exchange rate model," The North American Journal of Economics and Finance, Elsevier, vol. 25(C), pages 40-59.
    5. Andersen, Torben M & Sorensen, Allan, 2005. "Product Market Integration, Wages and Inequality," CEPR Discussion Papers 4963, C.E.P.R. Discussion Papers.
    6. Buccella Domenico, 2019. "A Simple Model for the Integration of Goods and the Capital Market with Unionized Labor Markets," Ekonomika (Economics), Sciendo, vol. 98(1), pages 19-37, June.

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