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Business and Economics > Investments: Stocks

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  • Type: Journal Issue x
  • Neoclassical Models of Trade x
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Cover IMF Working Papers
Technological Changes, Offshoring, and the Labor Share
Weicheng Lian
Existing studies on the downward trend in the labor share of income mostly focus on changes within individual countries. I document, however, that half of the global decline in the labor share of income can be traced to the relocation of activities between countries. I develop a two-country model to show that when the relative price of investment goods falls, production activities with a small elasticity of substitution between capital and labor tend to get offshored from high- to low-wage countries. The model provides an explanation as to why such relocation may drive the labor share down in both developed and developing economies, as well as globally.
Keywords:
WP; elasticity of substitution; cost of capital; Labor Share; Offshoring; Technological Changes; Relative Cost of Capital; investment goods; goods trade; capital-labor elasticity; labor cost share; Manufacturing; Wages; Stocks; Global; offshoring proxy; micro elasticity
Cover IMF Staff Country Reports
German-Central European Supply Chain-Cluster Report: Staff Report, First Background Note, Second Background Note, Third Background Note
International Monetary Fund. European Dept.
This paper discusses key findings of the Cluster Report on German-Central European Supply Chain (GCESC). Since the 1990s, a GCESC has evolved, manufacturing goods for export to the rest of the world. Reflecting this, bilateral trade linkages between Germany and the Czech Republic, Hungary, Poland, and the Slovak Republic (CE4) have expanded rapidly. Participation in the GCESC has led to technology transfers to CE4 countries and accelerated income convergence. Export growth in knowledge-intensive sectors has been particularly rapid in the CE4. It is also observed that complementarities between supply chain activities and domestic production have led to greater synchronization of the business cycle among GCESC countries.
Keywords:
ISCR; CR; GDP; CE4 FDI; Germany; CE4 Countries Based; banking; trade linkage; stock position; exports to Germany; FDI stock; aggregate demand demand shock; safe haven status; Exports; Foreign direct investment; Financial statements; Spillovers; Stocks; Global; Asia and Pacific; Europe