This paper analyzes trade policy in an integrated market in which two firms are price competitors. If tariff or export subsidies are in place, there is no equilibrium in pure strategies. The import tariffs and export subsidies give one firm a price advantage in one market. The effect of this is...

Transferring low tech manufacturing jobs to cheap labour countries is often seen by part of the general public and policy makers as a step into the de-industrialization of the European economies. However, recent contributions have shown that the effects on home economies are rarely negative. Our...