Trade, Technology, And Wages: General Equilibrium Mechanics  

Oleh:

Nelson, Doulas

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 108 no. 450 (Sep. 1998), page 1483-1499.
Fulltext: 1483.pdf (278.55KB)

Isi artikel

Markets are interdependent. Like the equally valid claim that reality is a seamless whole, this observation can be a useful reminder of the dif®culties we face as policy analysts.1 One way of avoiding the problems that arise with general equilibrium reasoning as a basis of policy analysis is to eschew general equilibrium altogether in favour of partial equilibrium analysis. This is an uneasy compromise in the best of circumstances (empirical convenience is no guarantee of analytical accuracy), but when the issue at hand is the link between international trade and relative wages, there is simply no substitute for general equilibrium analysis. Once embarked on a general equilibrium analysis, however, there is considerable art in the science. We must maintain an appropriate balance between the clarity and discipline imparted by the analytical framework and the compromises required if we are to extract compelling results.

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