In this Paper we study the location behaviour of a foreign and a domestic footloose firm competing in output in the domestic product market. Both firms produce a homogenous good using a labour intensive technology. While the domestic country is unionized, the foreign country is not. Location...

The Byrd amendment to US anti-dumping law distributes the revenue from anti-dumping duties imposed on foreign firms to the domestic firms that lodged the complaint of dumping. This Paper shows that the presence of the Byrd Amendment can yield lower duties and greater welfare than in its absence....

This paper considers the effect of exogenous trade bloc enlargement in a multicountry version of the Brander-Spencer export subsidy game. In the single-shot game, it is shown that trade bloc enlargement leads to a reduction in the Nash equilibrium export subsidies and thereby increases the...

In this paper, a domestic and a foreign firm compete as Cournot duopolists in the domestic market. The foreign firm has incomplete information about the costs of the domestic firm, but the domestic government and the domestic firm are completely informed. It is shown that the domestic government...

In the literature on the welfare effects of free trade under imperfect competition, one important case seems to have been overlooked and that is the Bertrand duopoly model with differentiated products. Although many authors have analysed the welfare effects of free trade under Cournot duopoly,...

In 1996, the British Government was accused of a protectionist "buy British" campaign when it awarded a contract for army ambulances to Land Rover. We present a model where the procurement decision of the government affects the perception of consumers in the rest of the world about the quality...

The measurement of quality is a difficult task given that quality typically is an unobserved product characteristic. In this paper we develop a new “Quality Indicator” based on a structural model with an identifiable quality parameter. We follow the methodology proposed by Di Comité, Thisse...

Work-related tax incentives can have a significant effect on how much, if at all, certain individuals decide to work. This paper examines the fiscal impacts and associated welfare costs of reforms to such tax relief measures in five European countries, France, Spain, the United Kingdom, Hungary...

This paper analyses how euro area inflation forecasts have been affected by the financial and economic crisis. Its first objective is to evaluate the accuracy of three representative groups of inflation forecasting models (rules of thumb and benchmark models; autoregressive moving average...

The paper studies the impact of a securities transaction tax (STT) on financial trading, stock prices and real economic variables in a closed-economy dynamic stochastic general-equilibrium model featuring financial frictions. The model incorporates channels by which 'noise trading' affects real...