Essays on equilibrium unemployment, growth, and international trade

This dissertation consists of four chapters analyzing the issues of wage inequality and unemployment in the context of dynamic general equilibrium models of growth. The second chapter examines the interaction between long-run growth and unemployment in a closed economy setting. The third chapter extends the analysis to a two-country framework and explores the impacts of trade liberalization on wage and unemployment differentials between skilled and less-skilled labor. The fourth chapter considers the effects of minimum-wage legislation on the global economy.; The second chapter constructs a model of equilibrium unemployment by combining an endogenous growth model with a variant of search theory. An increase in the size of innovations reduces the wage of less-skilled labor relative to that of skilled labor. In addition, it raises the equilibrium rate of unemployment of less-skilled labor relative to that of skilled labor. A higher rate of technological progress has two distinct effects on the aggregate unemployment rate. First, it increases the rate of labor turnover and therefore increases the aggregate unemployment rate---the creative destruction effect. Second, it creates R & D jobs that provide complete job security and consequently it reduces the aggregate unemployment rate---the resource reallocation effect.; The third chapter develops a model of R & D generated growth without scale effects and knowledge-based trade of higher quality products between two structurally identical countries. A global reduction in tariffs results in higher rates of innovation and growth. It also causes an increase in the expected relative earnings of skilled workers. In addition, trade liberalization increases the manufacturing unemployment rate, but has an ambiguous effect on the economywide unemployment rate.; The fourth chapter builds a model of knowledge-based trade between two countries, one with flexible wages (America) and another with a minimum wage for less-skilled workers (Europe). A rise in the minimum wage increases the unemployment rate in Europe. It also causes an increase in the relative wage of European skilled workers. On the other hand, the higher European minimum wage increases the proportion of industries with American leadership and reduces the relative wage of American skilled workers.