St.Petersburg Economic seminar (HSE, EU, PDMI) on February, 20: Roman Popov (EUSP)

Topic: Human Capital and Trade Liberalization
Date & Time: February, 20; 18:00 - 19:30
Venue: St Petersburg, Fontanka river embankment, 27, PDMI RAS, Marble hall (2nd floor)
Working language: Russian

Roman Popov (European University at St. Petersburg) will give a talk on Human Capital and Trade Liberalization.
Time: 18:00 - 19:30
Venue: St Petersburg, Fontanka river embankment, 27, PDMI RAS, Marble hall (2nd floor)

Abstract: We present a model of trade liberalization that integrates the dynamics effects of human capital accumulation into the welfare analysis of gains from trade. One of the most crucial channels through which trade openness affects economic growth has to do with incentives for human capital accumulation. We propose a dynamic Heckscher–Ohlin model of trade with two factors of production — unskilled labor and human capital. Agents’ individual skill acquisition decisions are affected by the intergenerational externalities. Unlike the static Heckscher–Ohlin model, there is no «cone of diversification» in our model, i.e. the open economy produces only one good. We show that the economy gains from trade liberalization in the short run, but there are different scenarios in the long run depending on initial conditions. If the economy specializes in skill-intensive good, then it always benefits from trade liberalization. If the economy specializes in labor-intensive good, then trade liberalization weakens the incentives for human capital accumulation and may lead to the loss of welfare when the relative price of labor-intensive good is sufficiently low.
Working language: Russian



Calendar: https://tinyurl.com/spbecon
Research seminar webpage: https://spb.hse.ru/en/scem/ilgt/hse-eusp-seminar