This paper shows that subsidy competition may be efficiency enhancing. We model a subsidy game among two asymmetric regions in a new trade model, where capital can freely move among regions, but capital rewards are repatriated. We study subsidy competition, starting from an equilibrium where the...

This paper shows that subsidy competition may be efficiency enhancing. We model a subsidy game among two asymmetric regions in a new trade model, where capital can freely move among regions, but capital rewards are repatriated. We study subsidy competition, starting from an equilibrium where the...

The deterioration of the income and employment position of unskilled workers in the OECD area since the 1980s is a well-documented fact. The debate about the causes of this development is dominated by two competing hypotheses, "North-South Trade" or "globalisation" and technological progress....

The deterioration of the income and employment position of unskilled workers in the OECD area since the 1980s is a well-documented fact. The debate about the causes of this development is dominated by two competing hypotheses, "North-South Trade" or "globalisation" and technological progress....