The gains and losses to factors of production from trade are discussed primarily within the context of the Stolper-Samuelson theorem which focuses on factor rewards. But policy makers are more concerned about employment effects of trade. This paper focuses on the short-run effects of trade on the incidence of layoffs in U.S. manufacturing industries. A probit model with endogenous switching is employed to estimate the effects of trade shocks and explore the role of comparative advantage on layoffs. The evidence suggests that trade shocks play a minor role in the incidence of layoff spells. However, net importing industries tend to adjust their labor force through layoffs to a greater extent than net exporting industries. Copyright 1995 by MIT Press.

International Trade, Comparative Advantage and the Incidence of Layoff Unemployment Spells

This paper develops a general equilibrium two country, two commodity dynamic simulation model of international trade in commodities and financial claims. The model generalizes the Heckscher-Ohlin static theory of trade by incorporating costs of quickly adjusting levels of capital stocks in particular industries; i.e., capital mobility in the short run is permitted, but at a price. The model predicts Heckscher-Ohlin relationships, including factor price equalization, in the long-run, but not during the economy's transition path to its ultimate steady-state. An interesting feature of the model is that it provides a determinate solution to the long-run inter- national allocation of the world's capital stock. This is true despite the fact that the Rybchinski-theorem holds in the long-run. The simulation model of international trade with costly capital stock adjustment appears capable of explaining many features of the patterns of factor price equalization, international investment, and changes in comparative advantage that have characterized the post-war period.

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The International Economics of Transitional Growth: The Case of the United States

As the end of World War II approached, the Allies, and in particular the USA, were determined to create a new international monetary order. Many believed that, in the 1930s, the worldwide transmission of deflation and the frequent recourse by countries to competitive devaluations had contributed to the Great Depression.

The Bretton Woods System

This study examines the employment effects of international trade in the United States for the first half of the 1980s. Using data from 113 manufacturing sectors at the 3-digit SIC level and regression techniques, the study attempts to explain employment changes in U.S. manufacturing in terms of import penetration ratios, international competitiveness, labor productivity, investments in plant and equipment and the industry concentration ratios. The results suggest that, although rising imports in the manufacturing sector have an overall adverse effect on manufacturing employment, this broad generalization does not hold at a disaggregated level. It concludes that employment levels in high value-added industries appear to have registered significant gains from international trade, while low value-added industries seem to have experienced significant losses.

Employment effects of international trade in the united states

Publisher Summary This chapter discusses the new nontariff protectionism in a response to shifts in national economic power after the World War II. The new protectionism threatening the international trading regime is related to significant structural changes in world production that have brought about a decline in the dominant economic position of the United States, a concomitant rise of the European Community and Japan to international economic prominence, and the emergence of a highly competitive group of newly industrializing countries. The trading regime expected to develop after World War II involved a shared responsibility on the part of the major economic powers for maintaining open and stable trading conditions. However, the unexpected magnitude of the immediate postwar economic and political problems thrust the United States into a hegemonic role. U.S. economic dominance manifested itself in the trade, finance, and energy fields and enabled American producers to establish strong export and investment positions abroad. Yet, by facilitating the reconstruction and development of Western Europe and Japan as well as the industrialization of certain developing countries, U.S. hegemonic activities led eventually to a marked decline in the American share of world exports and a significant rise of import competition in both labor-intensive sectors and certain oligopolistically organized industries. These developments also significantly diminished the leadership authority of the United States.

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The New Protectionism: A Response to Shifts in National Economic Power

This paper presents and analyzes the data on the trends in United States international trade and investment since World War II. From this data we can perceive a shrinking United States fraction of manufacturing output and exports, a return to and strengthening of lines of comparative advantage, and balanced and rapid growth in long-term investment. We can also see increasing volatility of trade and long-term investment in the 1970s, along with a real depreciation of 25 percent in the weighted United States exchange rate.

Herbert Giersch

Papers

Trends in U.S. International Trade and Investment Since World War Ii