- ... unemployment1
- Chiu and Karni (1998, p. 807) point out that the intention of UI is to insure against income losses associated with being laid off involuntarily.
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- ... regions2
- In what follows, the termini rich and poor regions are used synonymously with "regions characterised by relatively low/ high unemployment rates", respectively.
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- ... good3
- The consumption good and the produced good need not literally be identical, as long as they are both traded at exogenously fixed prices on world markets, see Wellisch and Wildasin (1996, p. 192).
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- ... reads4
- For the sake of simplicity, the superscript
is omited in this submodel. The results apply to both regions.
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- ... thus5
- Note that from the definitions of
and
it is straightforward that
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,
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,
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and
. The sign of
is negative in general.
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- ...
respectively6
- The signs of the derivatives only follow if
, which is guaranteed by the
choice of the parameters made hereafter.
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