G. P. Kouretas - Wages, Flexible Exchange Rates and Commercial Policy
The purpose of this paper is to analyze the macroeconomic effects of commercial policy in the form of a general non-retaliatory tariff imposed by a small open economy under flexible exchange rates. The Mundellian analysis which has dominated the discussion in this area has been that a tariff will reduce output and employment. We show that these results are not robust and we derive sufficient conditions in a consistently specified aggregate demand-supply model, under which tariffs may increase output and employment in the long-run. It is further shown that the final outcome depends on the wage-setting regime and on the assumptions we make about the form of the demand for money function.
Year of publication: |
1993
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Authors: | Kouretas, Georgios P. |
Published in: |
Economia Internazionale / International Economics. - Camera di Commercio di Genova. - Vol. 46.1993, 2-3, p. 225-246
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Publisher: |
Camera di Commercio di Genova |
Saved in:
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