Comments by Naoyuki Yoshino, on Gains from Trade Liberalization between Heterogeneous Countries: Implications for the Korea–Japan FTA

Abstract

October 01 2016 Comments by Naoyuki Yoshino, on Gains from Trade Liberalization between Heterogeneous Countries: Implications for the Korea–Japan FTA Author and Article Information Online Issn: 1536-0083 Print Issn: 1535-3516 © 2016 by the Earth Institute at Columbia University and the Massachusetts Institute of Technology2016Massachusetts Institute of Technology Asian Economic Papers (2016) 15 (3): 167–168. https://doi.org/10.1162/ASEP_a_00465 Cite Icon Cite Permissions Share Icon Share Facebook Twitter LinkedIn MailTo Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Peer Review Search Site Citation Comments by Naoyuki Yoshino, on Gains from Trade Liberalization between Heterogeneous Countries: Implications for the Korea–Japan FTA. Asian Economic Papers 2016; 15 (3): 167–168. doi: https://doi.org/10.1162/ASEP_a_00465 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search Dropdown Menu toolbar search search input Search input auto suggest filter your search All ContentAll JournalsAsian Economic Papers Search Advanced Search Naoyuki Yoshino: This paper addresses the welfare gains obtained from a Korea–Japan free trade agreement (FTA). The model considers search and matching frictions in the labor market. It incorporates country-level heterogeneity in production technology, population, and productivity endowment. When the two countries have the same population size, Japan receives greater benefits from a FTA because the more capital-intensive production of Japan allows much quicker adjustment upon trade liberalization. The size of the population of Japan is 2.5 times that of Korea, however, therefore Korea enjoys a greater surplus because of the market-size effect. There are various restricted assumptions in the model and real Korean and Japanese economies are somewhat different from the model described in the paper. Japan and Korea have a large labor market for graduates from school. Many people work under the seniority wage rate rather than negotiate their salaries. Wage rates in Japan and Korea are based... You do not currently have access to this content.