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...

This paper explores the role of multilateral transfers in achieving strict Pareto improvements in welfare, focusing on identifying conditions under which their use is warranted when carbon prices differ internationally and there are impediments to international trade. Using a general equilibrium...