Trade and long term unemployment

What is the effect of international trade on unemployment? In this paper,[1] we explore the link between openness to trade and unemployment using a multi-country, multi-sector gravity model with embedded heterogeneous sector-and-country specific labour market frictions. Specifically, we introduce Diamond-Mortensen-Pissarides search-and-matching frictions, as modelled in Helpman and Itskhoki (2010)…