The authors study a model in which a customs union trades with countries that behave strategically. Provided that the members of the customs unions are similar but not identical, they show that both in the case in which intraunion transfers are allowed as well as in the one in which they are...

If capital lowers marginal cost and a firm with more capital gets a bigger share of the surplus in merger bargaining, then the equilibrium price with a merger may be lower than without a merger. If entry is restricted, the level of industry profits minus investment costs may be higher if mergers...

The paper examines privatization in Hungary over the last decade. It investigates the `spontaneous privatization' of the late 1980s and its relation to today's privatization efforts. It studies the changes in the economic structure of Hungary since 1988, and provides detailed information...

In this paper we obtain the time-consistent solution to a stochastic dynamic version of the strategic export subsidy problem. The dynamic structure of the problem emanates either from an exhaustible resource or from a learning-by-doing technology. In any given period, nature ‘chooses’ the...

The objective of this paper is to highlight the importance of the ‘public finance’ impact of international migration on wages and welfare. To this end, we construct a general equilibrium model of a labour-exporting (source) and a labour-importing (host) country with identical consumers,...

Partial cooperation in setting trade and industrial policies may not benefit members of a customs union if exporters outside the union react aggressively. Even if the union comprises the entire noncompetitive sector of industry, cooperation on trade policy may be disadvantageous if industrial...

This Paper constructs a general equilibrium trade model of a small open economy producing an exported good, an imported good and a non-traded good by using two or more factors of production, one of which, namely capital, is imperfectly internationally mobile. Within this framework, it is shown...