Using a competitive two-country two-commodity monetary model with optimizing agents in which persistent unemployment arises, this paper examines the effects of trade restrictions on consumption and employment in the two countries. When facing unemployment, a country tends to impose an import...

We relax the standard assumption in the strategic trade policy literature that governments possess complete information about the economy. Assuming instead that governments must obtain information from firms, we examine firms’ incentive to disclose information to the governments in the...

This paper provides a welfare comparison of a tariff with a combination of a production subsidy to, and a commodity tax on, an import-competing commodity in a two-country economy. We treat some plausible situations of industry protection, including where the initial tariff is above the optimal...

We investigate how port privatization affects port charges, firm profits, and welfare. Our model consists of an international duopoly with two ports and two markets. When the unit transport cost is large, privatization of ports decreases the prices for port usage, although neither government has...

We develop a 2×2×2 model with the following features: (1) one sector is perfectly competitive while the other is oligopolistic; (2) one country has unemployment while the other attains full employment; (3) oligopolists move internationally; and (4) the ownership of each oligopolist is...

We analyze the effect of the Byrd Amendment, which amended the US Tariff Act of 1930 to allow revenue from antidumping duties to be distributed to domestic import-competing firms. In an international duopoly framework it is shown that it urges the home firm to restrict output so that the foreign...

This paper develops a dynamic theory that accounts for the evolution of trade policy, underlying internal class conflicts, and output growth performance over the last few centuries. By analyzing political responses to the distributional effects of international trade, it finds a prominent...

This paper analyzes the role of production distortion for income redistribution in an international trade model. In particular, this paper examines the role of the Stolper and Samuelson effect (Stolper and Samuelson 1941) on efficient income redistribution. It first shows that production...

Incorporating weakly nonseparable preferences into the familiar time-preference model, we emphasize a role of steady-state welfare changes in determining the effect of permanent tariffs on the current account. The effect consists of: a welfare effect, due to steady-state welfare changes, which...

Global warming is a serious and acute threat to our planet, but, when negotiating the allocation of permissible carbon emissions, conflicts of interest exist between developed and developing countries. Developing countries insist that global warming is the result of prolonged pollution emissions...