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GTAP Resources: Resource Display

GTAP Resource #3178

"A Hybrid Production Structure in Trade: Theory and Implications"
by Das, Gouranga


Abstract
In models of pure theory of international trade, no unique production structure is dominant. By grafting a specific factor structure onto a Heckscher-Ohlin framework, in a hybrid general equilibrium production model, this paper presents theoretical results with implications such as: (a) relative price increase of a traded goods sector might have expansionary or contractionary output effect depending on factor-intensities; (b) uniform primary-factor augmenting technical progress in the intermediate inputs sector might lead to a decline in the output of one of the sectors; (c) favorable relative price effect in one sector will lead to drop in return to the specific capital type depending on the grafted production structure. The proposed framework is useful for explaining stylized facts related to wage inequality, deindustrialization and export-processing, which have number of policy relevance for trade and development.

Keywords: Specific Factor; Heckscher-Ohlin; Hybrid Structure; Magnification effect, Wage gap.


Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
Status: Published
By/In: International Review of Economics, August 2009, Springer-Verlago
Date: 2009
Version:
Created: Das, G. (10/10/2009)
Updated: Batta, G. (10/12/2009)
Visits: 1,968
- Domestic policy analysis
- Economic development
- Labor market issues


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