Trade, capital mobility, and the German labour market

Trade, Capital Mobility, and the German Labour Market. - This paper sets up three structural variants of a general equilibrium model of a small open e conomy with three sectors (exportables, importables, non-tradables) and thr ee factors (internationally mobile capital and immobile skilled and unskill ed labour) in order to analyse the employment and wage effects of globalisa tion shocks. The model is numerically implemented for West Germany in 1980 on the base of input-output tables and employment data from a random sample of social security accounts. Overall this study indicates that the globali sation process does not have strong effects on unemployment and/or the wage differential in West Germany. JEL no. F16, F21, J31.