Title

An empirical investigation of the relations among wage differentials, productivity growth, and trade

Document Type

Article

Department or Administrative Unit

Economics

Publication Date

7-18-2008

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.

Comments

This article was originally published in Contemporary Economic Policy. The full-text article from the publisher can be found here.

Due to copyright restrictions, this article is not available for free download from ScholarWorks @ CWU.

Journal

Contemporary Economic Policy

Rights

© Western Economic Association International

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