This paper reconsiders the welfare effects of; tariff jumping; direct investment if mobile capital is subjected to taxation. In contrast to the conventional wisdom, the receiving country may in this case gain from the incremental inflow of capital, as this diverts tax revenues from the rest of...

A country's production possibility frontier or PPF is defined as the boundary of its economy's production set in the net output space for a given technology and fixed quantities of primary factors of production. In general equilibrium theory, exogenous changes in technology or primary-factor...

In this paper we show that price equalization does not imply zero barriers to trade. There are many barrier combinations that deliver price equalization, but each combination implies a different volume of trade. We demonstrate this first theoretically in a simple two-country model and then...

How does factor accumulation affect the pattern of international specialization and returns to capital? We provide a new integrated treatment to this question using a panel of 44 developing and developed countries over the period 1976-2000. We confirm the Heckscher-Ohlin prediction that, with...

This volume was prepared by Sebastian Benz while he was working at the Ifo Institute. It was completed in December 2013 and accepted as a doctoral thesis by the Department of Economics at the University of Munich. It includes five self-contained chapters. All chapters discuss different...

This paper sounds a caution to international trade economists, demonstrating that the equilibrium trade imbalances implied by most models of international investment disturb the symmetry between import tariffs and export taxes found by Lerner (1936). When trade is unbalanced, Lerner's...

This paper reviews the most significant recent developments in the theory of trade agreements. The paper offers an integrated approach to evaluating trade agreements, and uses the approach to present results on preferential and multilateral trade agreements. The paper identifies also several...

The paper studies the revenue, efficiency, and distributional implications of a simple strategy of offsetting tariff reductions with increases in destination-based consumption taxes so as to leave consumer prices unchanged. We employ a dynamic micro-founded macroeconomic model of a small open...

Recently, the world economy has seen its greatest down turn since World War II. Although not as bad as during the Great Depression, there was still a worrisome increase in protectionist measures, in an attempt to mitigate the economic downturn. Protectionism can have many different faces. It can...