Publication

This paper explores the effect of trade liberalization on long run unemployment in a model of endogenous growth, where growth is the result of a creative destruction process. The author studies the effect of trade liberalization between two identical economies on unemployment. He looks at two versions of the growth model, one where trade liberalization has only a temporary effect on growth and one where it has a permanent effect. The paper concludes that in both versions trade liberalization has a steady state effect on unemployment that can be either negative or positive, depending on parameters.