We examine the incentives for a government to levy an optimal tariff on a foreign monopolist. With complete information, the home government uses tariffs to extract rents and therefore implements a policy of discriminatory tariffs entailing higher tariffs on more efficient firms. By contrast if...

This paper shows how distance may be used to coordinate on a unique equilibrium in which trade agreements are regional. Trade agreement formation is modeled as coalition formation. In a standard trade model with no distance between countries, a familiar problem of coordination failure arises...

NOTE: The following is a description of the paper and not the actual abstract. Most studies of the welfare impacts of trade policy have ignored interactions between restrictive trade policies and pre-existing distortions from the income tax. This paper adds an income tax and consumer...

Most studies of the welfare impacts of trade policy have ignored interactions between restrictive trade policies and pre-existing distortions from the income tax. This paper adds an income tax and consumer labor/leisure decision to a specific factors trade model in order to examine the effects...

The paper presents a unified treatment of optimal trade policy for a small country. The well-known results for duopoly and competitive markets emerge as benchmark cases of the authors' model. In addition, it is shown that changes in market structure have nonmonotonic effects on optimal tariffs....

This paper extends an economic geography model by tariffs to analyze their impact on welfare and sustainability of agglomerations. Policies with and without cooperation are compared, with the goal of maximizing aggregated welfare in the former and regional welfare in the latter case. The main...

What tariffs would countries impose if they did not have to fear any retaliation? What would occur if there was a complete breakdown of trade policy cooperation? What would be the outcome if countries engaged in fully efficient trade negotiations? And what would happen to trade policy...