the possibility of conducting several different types of simulation experiments within one model, the relationship between different existing approaches may be clarified. For example, the results presented here suggest that a factor content calculation of the labour market impact of trade may in some cases be a good approximation to the full impact of trade on labour demands, but in other case may miss very significant effects. Running alternative experiments within a single model also helps clarify the nature of the assumptions being made in the different cases, in particular that the exogenous change must be different in a simulation of a trade change with factor prices fixed from a simulation of the same trade change with factor markets clearing.
The most important conclusion of the chapter, however, is that any model, whether or not of the CGE type, based on the assumptions that goods within a reasonably broad industrial classification are homogeneous and that there is a small number of homogenous factors of production, is likely to miss much of the impact of trade on the relative fortunes of skilled and unskilled workers in advanced economies.
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