We study firm heterogeneity in a specific factors model to address the effect of factor mobility on reallocation gains from trade. A model is proposed with Melitz type firm heterogeneity with two sectors, two countries and two fixed factors and one factor mobile across sectors. Equilibrium in...

The main conclusions of the thesis are that pension reform can be welfare improving if losses and benefits are redistributed by the central government. The possibility of welfare improving social security reform comes from a more efficient use of an immobile production factor, such as land....

Previous literature concludes that replacing wage taxation by taxes on a fixed factor or its rents benefits future generations. However, the effects of such steady-state gains on the transition generations have been left open. In this paper, we show that taxation of rents may also increase...