Econometrica: Jan 1958, Volume 26, Issue 1

Sur une correlation possible entre production, importations et emploi dans les pays industriels<146:SUCPEP>2.0.CO;2-L
p. 146-156

Philippe Carre

For the larger industrial countries--and especially the United States--there seems to exist a fairly strong correlation between the level of industrial production and the volume of non-agricultural employment. This correlation tendsto show that the productivity of labour, in a given country, depends primarily upon the size of its economy. For smaller industrial countries, in which foreigntrade often plays a much more important role, the correlation between productionand employment no longer applies. In the present article, an attempt is made to show that this correlation may be generalized, on the assumption that the productivity of labour (and the size of the economy), is a given country, depends not only upon the number of persons engaged in production, but also on the intensity of its participation in the international trade. It is hoped that the results here presented may help to clear the ground for the measurement of the economic effects of trade policies, for the elaboration of longterm plans, and perhaps also for the study of such regional arrangements as Common Markets or Free Trade Areas.

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