We present a simple two(-country) by two(-good) differental game model of international trade in which the governments of the two countries play a tariff-setting game. We explicitly derive a unilateral optimum tarifff rate and then a Markov-perfect equilibrium pair of tariff strategies...

We develop a model of international trade with increasing returns to scale by taking into account the possibility of cooperation among agents in an egalitarian economy. It is shown that each country gains from trade in a trading world in which there are arbitrary numbers of...

In the present note we construct an overlapping-generations (OLG) example in which free trade is Pareto-improving and the world equilibrium chaotic. The example is simple, but it is not incompatible with the general model of Kemp and Wolik.

The conclusions of the 1976 Kemp-Wan proposition are shown to be substantially valid even if all tariff vectors, both pre-union and post-union, are optimally chosen.

This paper presents a dynamic general equilibrium model of multi-country, two-good and two-factor, in which both long-run growth and international trade patterns are examined. In each country, government expenditure on a public intermediate good plays a crucial role in the realization of...

The theory of involuntary international transfers (war indemnities) has been constructed on the assumption that the donor and recipient are completely indifferent to each other's well-being. The assumption is hard to justify since usually the transfers closely follow periods during which the...