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• W1978391338 abstract "The paper puts forward the hypothesis that the transitory effects of trade liberalization on wage inequality can differ from the long-run outcome. In cases where the HOS theory predicts a decline in wage inequality in the long run, a temporary rise can, nevertheless, occur due to (i) the asymmetries in the speed of contraction in the import sector and expansion in other sectors, and (ii) the capital-skill complementarity in production. The asymmetric contraction and expansion causes a transitory capital accumulation that boosts the relative and the real wage of skilled labor due to capital-skill complementarity. Although the long-run HOS fundamentals are, therefore, dominated in the short run by the transient effects arising due to capital-skill complementarity, the observed rise in wage inequality is nonetheless consistent with the HOS theory appropriately extended to a dynamic setting." @default.
• W1978391338 created "2016-06-24" @default.
• W1978391338 creator A5030485115 @default.
• W1978391338 date "2007-04-01" @default.
• W1978391338 modified "2023-10-11" @default.
• W1978391338 title "Trade liberalization and rising wage inequality in Latin America: Reconciliation with HOS theory" @default.
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• W1978391338 doi "https://doi.org/10.1016/j.jinteco.2006.06.005" @default.
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