This paper examines the link between relative goods prices and relative wages during two periods of Mexico's trade liberalization. The relative price of skill-intensive goods rose following Mexico's entrance to the General Agreement and Tariffs and Trade (GATT) in 1986, but fell after Mexico entered the North American Free Trade Agreement (NAFTA) in 1994. This paper adds a band pass filter to two established techniques to compare the relationship between prices and wages. Results from all three approaches are consistent with a positive long-run relationship between relative output prices and relative wages. The band pass filter results suggest that the relevant time frame for the relationship begins after 3 -5 years. D Although over 100 recent papers analyze the relationship between globalization and wage inequality, the theoretical and empirical link between them remains contested. Starting with the Stolper -Samuelson theorem, a standard result in trade theory that links changes in goods prices and changes in relative factor prices, this paper considers two issues that arise in the trade and wages debate. The first issue is whether changes in relative prices can explain changes in relative wages and whether changes in tariffs and trade policy explain movements in relative prices. The second is when changes in relative prices affect relative wages.To examine these two questions, this paper examines Mexico's trade liberalization. Revisiting the Mexican case is important for two reasons. Studying the Mexican case may 0022-1996/$ -see front matter D

This study uses household-level data from the United States and Mexico to examine labor-market integration. I consider how the effects of shocks and rates of convergence to an equilibrium differential are affected by borders, geography, and demographics. I find that even though a large wage differential exists between them, the labor markets of the United States and Mexico are closely integrated. Mexico's border region is more integrated with the United States than is the Mexican interior. Evidence of integration precedes the North American Free Trade Agreement (NAFTA) and may be largely the result of migration.

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In this paper, we examine the impact of China's growth on developing countries that specialize in manufacturing. Over 2000-2005, manufacturing accounted for 32% of China's GDP and 89% of its merchandise exports, making it more specialized in the sector than any other large developing economy. Using the gravity model of trade, we decompose bilateral trade into components associated with demand conditions in importing countries, supply conditions in exporting countries, and bilateral trade costs. We identify 10 developing economies for which manufacturing represents more than 75% of merchandise exports (Hungary, Malaysia, Mexico, Pakistan, the Philippines, Poland, Romania, Sri Lanka, Thailand, and Turkey), which are in theory the countries most exposed to the adverse consequences of China's export growth. Our results suggest that had China's export supply capacity been constant over the [1995][1996][1997][1998][1999][2000][2001][2002][2003][2004][2005] period, demand for exports would have been 0.8% to 1.6% higher in the 10 countries studied. Thus, even for the developing countries most specialized in export manufacturing, China's expansion has represented only a modest negative shock.

Unlike most studies that calculate productivity as a residual, this study uses detailed plant-level data to examine the relationship between exposure to foreign markets and specific innovations including product design, investment in new tools (such as computers), research and development, and innovation in products and processes. The results suggest that exposure to foreign markets is positively related to most types of technology. The effects seem to be stronger in recently liberalized Mexico, which may suggest that the innovation gains from liberalization are greatest in the early stages of liberalization.Trade, investment, innovation, Chile, Mexico,