Publication

Oct 2009

This paper analyzes a partial equilibrium model of outsourcing with Cournot competition in intermediate goods production. It asks how changes in production costs, in particular wages, affect output and thus labor input in Western and Eastern Europe. The author proves analytically that under certain conditions higher production costs in one region reduce intermediate goods production in both regions.

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Author Michael Hübler
Series Kiel Institute Working Papers
Issue 1564
Publisher Kiel Institute for the World Economy
Copyright © 2009 Kiel Institute for the World Economy
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