The authors examine international trade in a commodity whose production creates a negative externality for the importing country and they consider the nations' strategic policy choices when they can restrict trade and when they are bound by a free-trade agreement. When pollution-abatement...

We analyse the tax/subsidy competition between two potential host governments to attract the plants of firms in a duopolistic industry. While competition between identical countries for a monopolist's investment is known to result in subsidy inflation, two firms can be taxed in equilibrium with...

The authors present a means of evaluating the effects of customs-union formation by a decomposition of the overall welfare effect into two components: the consequences of induced changes in domestic prices; and the effects on income of adjustments in tariff rates and endogenous changes in the...

This paper examines the decisions made by agents of countries as to their levels of education and physical capital accumulation and the consequent pattern of world trade. The influence on these decisions of the rate of population growth is examined, and it is determined that countries whose...

This paper examines whether the member countries of a customs union would gain from moving towards the next stage of economi c integration, the common market. When the set of common external tar iffs is not chosen optimally, increased factor mobility may reduce th e welfare of the customs union....