Citation:
Cuñat, Alejandro, and Marc Melitz. 2010. “A Many-Country, Many-Good Model of Labor Market Rigidities as a Source of Comparative Advantage.” Journal of the European Economic Association P&P 8: 434–441.
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Abstract:
We extend the theoretical framework in Cuñat and Melitz (2007) to a many-country setup where
countries exhibit different degrees of labor market flexibility. We rely on the insights from a
recent paper by Costinot (2009) to obtain precise predictions about comparative advantage in
this setting: countries with more flexible labor markets specialize in more volatile industries.