An empirical investigation of the relations among wage differentials, productivity growth, and trade
Department or Administrative Unit
Economics
Document Type
Article
Author Copyright
© Western Economic Association International
Publication Date
7-18-2008
Journal
Contemporary Economic Policy
Abstract
This article investigates the relations among productivity growth, wage differentials, and net exports in the United States. The time periods considered are the long run and the short run. Cointegration test results indicate that all the test variables are cointegrated. Therefore, productivity growth, wage differentials, and trade are all related in the long run. A short‐run investigation of the relations among productivity growth, wage differentials, and trade is conducted within a vector error correction (VEC) estimation structure. The VEC tests indicate that, contrary to the prevailing view, productivity growth and trade have no impact on wage differentials in the short run. At the same time, it is apparent that wage differentials and trade have a positive and statistically significant impact on productivity growth in the United States in the short run.
Recommended Citation
Ghosh, K., Saunders, P. J., & Biswas, B. (2002). AN EMPIRICAL INVESTIGATION OF THE RELATIONS AMONG WAGE DIFFERENTIALS, PRODUCTIVITY GROWTH, AND TRADE. Contemporary Economic Policy, 20(1), 83–92. https://doi.org/10.1093/cep/20.1.83
Comments
This article was originally published in Contemporary Economic Policy. The full-text article from the publisher can be found here.
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