The paper explores the role of government policies in a situation where the wage gap between high-skilled and low-skilled workers is widening owing to increasing foreign competition in low-skilled intensive goods. A two-period, three-sector general-equilibrium model of a small open economy is...

Under extraterritorial sanctions the sanctioning country extends its policies to trade of third countries with the sanctioned country. An example is President Trump's decision in 2018 to leave the Joint Comprehensive Plan of Action (JCPOA), a multilateral agreement with Iran. In this article, I...