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Globalization, trade imbalances and inequality

Publication ,  Journal Article
Dix-Carneiro, R; Traiberman, S
Published in: Journal of Monetary Economics
January 1, 2023

What is the role of trade imbalances for the distributional consequences of globalization? We answer this question through the lens of a quantitative, general equilibrium, multi-country, multi-sector model of trade with four key ingredients: (a) workers with different levels of skills are organized into separate representative households; (b) endogenous trade imbalances arise from households’ consumption and saving decisions; (c) production exhibits capital-skill complementarity; and (d) labor markets feature both sectoral mobility frictions and non-employment. We conduct a series of counterfactual experiments that illustrate the quantitative importance of both trade imbalances and capital-skill complementarity for the dynamics of the skill premium. We show that modeling trade imbalances can lead to stark differences between short- and long-run consequences of globalization shocks for the skill premium.

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Published In

Journal of Monetary Economics

DOI

ISSN

0304-3932

Publication Date

January 1, 2023

Volume

133

Start / End Page

48 / 72

Related Subject Headings

  • Economics
  • 3803 Economic theory
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 1403 Econometrics
  • 1402 Applied Economics
  • 1401 Economic Theory
 

Citation

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Dix-Carneiro, R., & Traiberman, S. (2023). Globalization, trade imbalances and inequality. Journal of Monetary Economics, 133, 48–72. https://doi.org/10.1016/j.jmoneco.2022.10.002
Dix-Carneiro, R., and S. Traiberman. “Globalization, trade imbalances and inequality.” Journal of Monetary Economics 133 (January 1, 2023): 48–72. https://doi.org/10.1016/j.jmoneco.2022.10.002.
Dix-Carneiro R, Traiberman S. Globalization, trade imbalances and inequality. Journal of Monetary Economics. 2023 Jan 1;133:48–72.
Dix-Carneiro, R., and S. Traiberman. “Globalization, trade imbalances and inequality.” Journal of Monetary Economics, vol. 133, Jan. 2023, pp. 48–72. Scopus, doi:10.1016/j.jmoneco.2022.10.002.
Dix-Carneiro R, Traiberman S. Globalization, trade imbalances and inequality. Journal of Monetary Economics. 2023 Jan 1;133:48–72.
Journal cover image

Published In

Journal of Monetary Economics

DOI

ISSN

0304-3932

Publication Date

January 1, 2023

Volume

133

Start / End Page

48 / 72

Related Subject Headings

  • Economics
  • 3803 Economic theory
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 1403 Econometrics
  • 1402 Applied Economics
  • 1401 Economic Theory