Chang, Pao-Li - In: East Asian Economic Review (EAER) 24 (2020) 3, pp. 237-252
This paper characterizes the optimal reciprocal trade policy in the environment of Melitz (2003) with firm productivity … heterogeneity. In particular, without making parametric assumptions on firm productivity distribution, this paper derives the … industry productivity, lowering aggregate price; a reciprocal import tariff helps correct the markup distortion, increasing …