Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248951 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9406
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
In this paper, we construct an elaborate general equilibrium model with a continuum of production fragments for an intermediate good, then embed it in a growth model to address the effects of global production fragmentation, vertical specialization and trade on growth and inequality for a small developing country. Among other results, we show that a small developing economy grows faster than the rest of the world as a result of global fragmentation and trade in intermediates if it is skilled-labor scarce. We also address the effects of such trade opening on wage inequality.
Subjects: 
vertical specialization
trade
growth
inequality
JEL: 
F10
Document Type: 
Working Paper
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