Davidson and Matusz (both of Michigan State U.) complain that most academic economists fail to account for issues of employment when investigating changes in trade policy. They offer a number of models that extend traditional economic analysis to account for labor markets characterized by workers whose labor-market experiences are punctuated by spells of involuntary unemployment. They test a range of policies on their general equilibrium model, looking for results on job creation and job destruction in U.S. manufacturing industries and indicators of income distribution.

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