International Trade and Labor Markets: Theory, Evidence, and Policy Implications

Carl Davidson, Steven J. Matusz9780880992732, 0880992735, 0880992743, 9780880992749, 9781417505920

Davidson and Matusz (both of Michigan State U.) complain that most academic economists fail to account for issues of employment when investigating changes in trade policy. They offer a number of models that extend traditional economic analysis to account for labor markets characterized by workers whose labor-market experiences are punctuated by spells of involuntary unemployment. They test a range of policies on their general equilibrium model, looking for results on job creation and job destruction in U.S. manufacturing industries and indicators of income distribution.