Skill Acquisition, Credit Constraints, and Trade

39 Pages Posted: 29 Sep 2006 Last revised: 31 May 2021

See all articles by Tatyana Chesnokova

Tatyana Chesnokova

University of Auckland - Department of Economics

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

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Date Written: August 2006

Abstract

This paper looks at the effect of credit constraints on skill acquisition when agents have heterogeneous abilities and wealth. We use a two factor general equilibrium model and assume credit markets are absent. We explore the effects of trade on factor earnings as well as the evolution of the distribution of income in small and large economies. Our work suggests that developed countries need to ensure access to education when liberalizing trade to ensure they reap the potential gains from trade.

Suggested Citation

Chesnokova, Tatyana and Krishna, Kala, Skill Acquisition, Credit Constraints, and Trade (August 2006). NBER Working Paper No. w12411, Available at SSRN: https://ssrn.com/abstract=933049

Tatyana Chesnokova

University of Auckland - Department of Economics ( email )

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Auckland
New Zealand

Kala Krishna (Contact Author)

Pennsylvania State University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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