A two-country, two-commodity model of trade is considered to reformulate the tariff retaliations. It is known that tariff retaliations lead to a Nash-equilibrium, a non-free-trade outcome. However, the negotiation process underlying the Nash equilibrium does not capture the notion of retaliation...

Labor markets in developing economies may be afflicted by a multiplicity of interacting distortions. We consider a general equilibrium model of an economy distorted by both sector-specific sticky wages and imperfect mobility of labor. In this framework, we contrast the implications of capital...

Commodity markets may be characterized by concentration on the buyer side, with a small number of transnational intermediary firms purchasing from supplying countries and distributing to the market. In many cases, developing economies may have little choice but to sell through these...

Here a numerical simulation model, implemented in Excel, that can be used to expand student understanding of the theory of customs unions is presented. The model allows examination of core customs union issues including trade creation, trade diversion, and the KempWan theorem. By responding to...

The authors show how the transformation loci in the specific factors model (capital specificity) and the Heckscher-Ohlin-Samuelson model (capital mobility) can be rigorously derived and easily compared by using geometric techniques on the basis of Savosnick geometry. The approach shows directly...