Market Interconnection and Wages

We study the impacts of terms trade changes on absolute and the real wages of skilled and unskilled labor and their gaps for an economy specialized in export production. We show an interesting result where wage behavior as well as the skilled-unskilled wage gap depend on elasticity of import demand, unlike in 3x2 classical-neoclassical specic-factor model of trade. Although, our analysis is in the spirit of Stolper-Samuelson theorem, given the structure of our model, factor intensity plays no role in our results as in the specic-factor model.skilled-unskilled labor, wage gap, terms of trade

Moving People or Jobs? A New Perspective on Immigration and International Outsourcing

We present a model that allows us to compare the effects that frictions involved in immigration and international outsourcing have on the skilled-unskilled wage inequality. We show that, for any given level of contractual friction in the production of intermediate goods, the wedge between the wages of the skilled and unskilled workers widens as the frictions in immigration wear out. The skilled-unskilled wage gap, for any given level of friction in immigration, is sensitive to variations in contractual frictions in intermediates that affect international outsourcing.Wage Inequality, Immigration, Outsourcing, Contract Theory.

International Migration and Real Wages

We provide an analysis of the impact of migration on the skilled- unskilled wage gap. In particular, we show the possibility of a rise in the wage gap following the migration of skilled (unskilled ) labor.

Mediator learning and dowry determination in an arranged marriage setting

Recently, Batabyal (2005) has analyzed a game model of dowry determination in which a mediator plays a key role. Batabyal's analysis shows that the equilibrium dowry offers from the bride and the groom optimally trade off the desire to make an assertive offer with the likelihood that this offer will be selected by the mediator. We extend the Batabyal (2005) analysis by studying the impact that learning—about the circumstances of a prospective marriage—by the mediator has on the tripartite interaction between the bride, the groom, and the mediator. Specifically, we first determine the optimal dowry offers from the bride and the groom in a separating perfect Bayesian equilibrium. Next, we show that the mediator perfectly infers the private information of the two parties from their dowry offers and that he then uses this information in part to select his preferred dowry offer.

Recessionary shock and factor return in an underemployed economy

This paper builds a general equilibrium model for a small open economy with unemployment of unskilled labor to assess the impact of a recessionary shock. It is shown that irrespective of the factor intensity assumption skilled wage and rental ratio goes up if recession led price fall is significant. However, when the price fall is not sufficiently big, factor intensity assumption becomes crucial for the eventual effect on factors’ return ration.International Trade, General Equilibrium

Trade, the Damage from Alien Species, and the Effects of Protectionism Under Alternate Market Structures

We first construct three measures of the expected damage from the unintentional introduction of alien species into a country called Home. We then focus on four market structures. First, perfect competition prevails in both Home and Foreign and Home is a small country. Second, the Home and the Foreign markets are both perfectly competitive but Home is now a large country. Third, the exporter in Foreign is a monopolist and there are no import competing firms in Home. Finally, the Foreign exporter and the import competing firm in Home engage in Cournot competition. In all four scenarios, we analyze the impact of small and optimal Home tariffs on prices, exports, imports, the damage from alien species, and social welfare, in Home. Inter alia, our analysis identifies conditions under which it makes sense to use trade policy (tariffs) to regulate invasive species and conditions under which it does not.Alien Species, International Trade, Market Structure, Social Welfare, Tariff

Cross-border Merger, Vertical Structure, and Spatial Competition

This analysis is a natural follow up of continued efforts to assess the consequences of cross-border mergers in industries with a vertical structure. Absent free trade, in a vertically related industry, the downstream firms will not choose the social optimum under spatial price discrimination when none of the downstream firms produce all the varieties that consumers demand. We show that free trade will induce the downstream firms to gravitate toward the social optimum but an upstream merger across borders, under free trade, will pull the downstream firms away from the social optimum back to their autarkic positions.Product-differentiation, Price-discrimination, Spatialcompetition, Firm-location, Cross-border Merger

Maritime Trade, Biological Invasions, and the Properties of Alternate Inspection Regimes

We analyze the problem of preventing biological invasions caused by ships transporting internationally traded goods between countries and continents. Specifically, we ask the following question: Should a port manager have a small number of inspectors inspect arriving ships less stringently or should this manager have a large number of inspectors inspect the same ships more stringently? We use a simple queuing-theoretic framework and show that if decreasing the economic cost of regulation is very important then it makes more sense for the port manager to choose the less stringent inspection regime. In contrast, if reducing the damage from biological invasions is more salient then the port manager ought to pick the more stringent inspection regime.

Can International Factor Mobility lessen Wage Inequality in a Dual Economy?

We introduce international labor mobility in a three-sector general equilibrium model with rural-urban migration. We demonstrate that under some reasonable conditions an inflow of foreign skilled labor (capital) can reduce skilled-unskilled wage inequality.Skilled-unskilled wage inequality; rural-urban migration; Unemployment; International factor movements

PREFERENTIAL TRADE ARRANGEMENTS: IMPACTS ON AGRICULTURAL TRADE AND INCOME

In this article, we focus on the effects of preferential trade arrangements on agricultural trade and agricultural income. Given the large number of preferential trade arrangements and complex interactions among them, we attempt to discover whether preferential trade arrangements are beneficial to agricultural trade and income, and are an effective tool to liberalize agricultural trade. The findings suggest that preferential trade arrangements with some exceptions tend to expand agricultural trade and improve agricultural income.agricultural trade, agricultural income, gravity model, preferential trade agreement, International Relations/Trade,