Despite compelling rationale based on the theory of comparative advantage for free trade, many countries adopt restrictive trade practices. In this paper we investigate this puzzle in a stylized two-country two-good Ricardian model of international trade.Governments can offer protection to...

The transfer paradox describes the situation in which transfers of initial endowments within competitive market make the donor better off and (or) the recipient worse off. Advantageous redistribution, strong transfer paradox, and Chichilnisky paradox are the three cases of the transfer paradox...

With heterogeneity of risk aversion, a representative agent does not exist so both individuals' and aggregate risk premium cannot be expressed by relative/absolute risk aversion. This paper suggests a new way to calculate the risk premium with market contingent-claim prices without the...