International Trade, Labour Market and Economic Growth in Long Term

Astra Auzina-Emsina

Abstract


General global trend in advanced economies indicates decreasing working hours and increasing labour productivity. The aim of the research is to examine the existing relationships between hours worked, labour productivity and international trade in the long-term. In the study, OECD and more in detail, some EU countries (Latvia, Estonia, Lithuania, Poland, Germany) are selected. The research period is 1995–2021. The results indicate that employees are working fewer hours, receiving more and generating larger economic output per person employed. This relation is detected in many EU countries. In the long term, advanced and stable economies (such as Germany) differ from emerging and previously so-called transition economies (Poland, Latvia etc.) in the EU. More efficient use of labour resources is linked with both application of modern technologies and the growing importance of high-tech industries that lead to higher economic output. High energy costs impact the selection of technologies, replacement to more efficient ones and innovations in the production process, transportation and storage. The results argue that high-tech exports are strongly linked with high-tech imports due to high import dependency. Faster well-balanced recovery and stable performance are expected in the majority of countries and market segments domestically in the post-COVID era.

Keywords:
international trade; labour productivity; real GDP growth; long-term trends; recovery

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References


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DOI: 10.7250/scee.2022.001

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