factor prices and on environmental outcomes. We model an output subsidy, a capital subsidy, relief from environmental … regulation, and a direct cash subsidy. In exchange for receiving subsidies, firms must agree to a minimum level of labor … employment. Each type of subsidy and the employment constraint create both output effects and substitution effects on input …

We formalize the notion that GATT exceptions such as antidumping and escape clause actions can act as insurance for … sectors and assume incomplete markets so that agents cannot contract insurance. We show that these measures are superior to … uniform tariffs as insurance mechanisms. Moreover, we demonstrate that the optimal uniform policy may not involve a tariff at …