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Gravity Redux: Estimation of gravity-equation coefficients, elasticities of substitution, and general equilibrium comparative statics under asymmetric bilateral trade costs

Bergstrand, Jeffrey H.; Egger, Peter; Larch, Mario - In: Journal of International Economics 89 (2013) 1, pp. 110-121

A large class of models with CES utility and iceberg trade costs are now known to generate isomorphic “gravity equations.” Economic interpretations of these gravity equations vary in terms of two basic elements: the exporter's “mass” variable and the elasticity of trade with respect to...

Persistent link: https://www.econbiz.de/10011056323

Optimal tariffs, retaliation, and the welfare loss from tariff wars in the Melitz model

Felbermayr, Gabriel; Jung, Benjamin; Larch, Mario - In: Journal of International Economics 89 (2013) 1, pp. 13-25

This paper characterizes analytically the optimal tariff of a large one-sector economy with monopolistic competition and firm heterogeneity in general equilibrium, thereby extending the small-country results of Demidova and Rodríguez-Clare (JIE, 2009) and the homogeneous firms framework of Gros...

Persistent link: https://www.econbiz.de/10011056329

Spatial exporters

Defever, Fabrice; Heid, Benedikt; Larch, Mario - In: Journal of International Economics 95 (2015) 1, pp. 145-156

In this paper, we provide causal evidence that firms serve new markets which are geographically close to their prior export destinations with a higher probability than standard gravity models predict. We quantify the impact of this spatial pattern using a data set of Chinese firms which had...

Persistent link: https://www.econbiz.de/10011191003

Flexible outsourcing and the impacts of labour taxation in European Welfare States

Koskela, Erkki (contributor); Poutvaara, Panu (contributor) - 2008

more competitive. To focus on this aspect, we analyze how flexible international outsourcing and labour taxation affect … wage formation, employment and welfare in dual domestic labour markets. Higher productivity of outsourcing, lower cost of … outsourcing and lower factor price of outsourcing increase wage dispersion between the skilled and unskilled workers. Increasing …

Persistent link: https://www.econbiz.de/10003755959

Is there scope for gains from revenue-neutral labor tax reforms with flexible outsourcing?

Koskela, Erkki; Poutvaara, Panu - 2009

Nash wage bargaining and flexible outsourcing. A revenue-neutral increase in the wage tax progression will decrease the … negotiated wage rate, increase domestic labor demand and decrease international outsourcing. In the presence of wage tax … exemption, a lower payroll tax and a higher wage tax will increase domestic labor demand and decrease international outsourcing …

Persistent link: https://www.econbiz.de/10003808576

Outsourcing and labor taxation in dual labor markets

Koskela, Erkki (contributor); Poutvaara, Panu (contributor) - 2008

We evaluate the effects of international outsourcing and labor taxation on wage formation and equilibrium unemployment … in dual labor markets. Outsourcing promotes wage dispersion between the high-skilled and low-skilled workers. Higher … domestic low-skilled wage tax, higher payroll tax and lower wage tax exemption increase optimal outsourcing. Outsourcing will …

Persistent link: https://www.econbiz.de/10003719633