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Workers and trade liberalization: simulating the potential impact of the FTAA on Venezuela's output and wages

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  • Hugo Toledo

Abstract

The Specific Factors model of production and trade with seven skilled labour categories and specific capital in three leading sectors of the Venezuelan economy is used to produce comparative static elasticities of changing prices on factor prices and output as a result of the emerging Free Trade Agreement of the Americas (FTAA). Results show that every labour group except production labour is projected to lose under free trade, while manufacturing capital gains at the expense of capital in agriculture and services due to a projected increase in export demand. Adjustments to free trade are large implying the importance of economic policy in the transition period to free trade.

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  • Hugo Toledo, 2006. "Workers and trade liberalization: simulating the potential impact of the FTAA on Venezuela's output and wages," Applied Economics, Taylor & Francis Journals, vol. 38(9), pages 1063-1069.
    • Handle: RePEc:taf:applec:v:38:y:2006:i:9:p:1063-1069
    DOI: 10.1080/00036840500400103
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    References listed on IDEAS

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    1. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    2. Thompson, Henry, 1994. "An investigation into the quantitative properties of the specific factors model of international trade," Japan and the World Economy, Elsevier, vol. 6(4), pages 375-388, December.
    3. Chang, Winston W, 1979. "Some Theorems of Trade and General Equilibrium with Many Goods and Factors," Econometrica, Econometric Society, vol. 47(3), pages 709-726, May.
    4. Henry Thompson, 2000. "International Markets," World Scientific Book Chapters, in: International Economics Global Markets and International Competition, chapter 1, pages 3-37, World Scientific Publishing Co. Pte. Ltd..
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