Lahiri, Sajal; Raimondos-Møller, Pascalis; Wong, Kar-yiu; … - Economic Policy Research Unit (EPRU), Økonomisk Institut
This paper investigates the optimality of international income transfers in a two-country model in which each country engages in non-cooperative trade policy behaviour. It is shown that unconditional income transfers can never be optimal for the donor country, which not only suffers the loss of...