Separate demand equations for imports from less-developed countries (LDCs) and imports from developed countries (DCs) were estimated for each of eleven representative product groups. Imports were found to compete quite readily with domestically produced goods, with plausible own-price and cross-price elasticities. Whereas the quantity of each type of import was found to be quite responsive to changes in the price of US home goods, each appears to be less sensitive to the price of the alternative import. An explanation that is consistent with this observation, and that finds support from detailed industry information, is that DCs and LDCs supply goods that are at different stages in the product or technology cycle, whereas US producers compete in all submarkets. This suggests that trade creation rather than trade diversion provides the predominant inroad for LDCs into the US market. 25 references, 3 tables.

In this paper we study the determinants of intersectoral factor mobility. Mobility is the outgrowth of a prior investment decision. In particular, we focus on the human capital (i.e., training) decisions of workers. Uncertainty isa critical feature in such training decisions. The acquisition of general (vs. specific) skills allows a worker to select the more favorable sector after uncertainty is resolved. Thus general training has option value, which is enhanced by increases in risk. General training is a form of self-insurance. We study the impact of conventional insurance opportunities on training decisions. We find that the availabilty of income insurance does not necessarily imply less mobile workers.

This paper analyses trade in manuf acutured goods that are produced via a vertical production structure with many stages, where some value is added at each to an intermediate product to yield a good-in-process ready for the next stage. We consider the stage at which a good is traded to be an economically endogenous variable, with comparative advantage determining the pattern of production specialization by stages across countries. We study how endowment changes and policy shifts move the margin of comparative advantage, which thus provides a channel for resource allocation adjustment that is additional to the usual ones of factor substitution and changes in the quantity of output.

In this paper we study the determinants of intersectoral factor mobility. Mobility is the outgrowth of a prior investment decision. In particular, we focus on the human capital (i.e., training) decisions of workers. Uncertainty isa critical feature in such training decisions. The acquisition of general (vs. specific) skills allows a worker to select the more favorable sector after uncertainty is resolved. Thus general training has option value, which is enhanced by increases in risk. General training is a form of self-insurance. We study the impact of conventional insurance opportunities on training decisions. We find that the availabilty of income insurance does not necessarily imply less mobile workers.