Labor unions, globalization, and mercantilism
"We analyze the growth and welfare effects of globalization in a dynamic Schumpeterian North-South product-cycle model. Economic growth is driven by R&D activities of Northern entrepreneurs. Top Northern production technologies are imitated by the South. In the North, there is wage bargaini...
| Main Authors: | , , |
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| Institution: | ETUI-European Trade Union Institute |
| Format: | TEXT |
| Language: | English |
| Published: |
Munich
2009
CESifo |
| Subjects: | |
| Online Access: | https://www.labourline.org/KENTIKA-19185205124919034879-Labor-unions,-globalization,-a.htm |
| Summary: | "We analyze the growth and welfare effects of globalization in a dynamic Schumpeterian North-South product-cycle model. Economic growth is driven by R&D activities of Northern entrepreneurs. Top Northern production technologies are imitated by the South. In the North, there is wage bargaining between a labor union and firms, and a minimum wage rate exists. Unilateral Northern trade liberalization reduces the rate of innovation, increases Northern unemployment, and reduces both Northern and Southern per-capita welfare. The effects are reversed in the case of unilateral Southern trade liberalization. Hence, wage bargaining above a given minimum wage promotes mercantilist behavior of developed countries." |
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| Physical Description: | 40 p. Digital |