Welfare with the maximum-revenue tariff is compared to free-trade welfare under perfect competition in the case of a large country able to affect its terms of trade; under Cournot duopoly with differentiated products; and under Bertrand duopoly with differentiated products. Under perfect...

A model of strategic investment and trade is incorporated in a politiacl economy framework of the Grossman-Helpman type to study the impacts of foreign direct investment (FDI) on the formulation of trade and industrial policies in the host country.

A two-country (North-South) endogenous-growth model is constructed where foreign direct investment (FDI) acts as the conduit of cross-border knowledge spillovers and learning.

The paper first demonstrates that in a simple asymmetric n-country world with Cournot competition, constant returns and linear demand, free trade can reduce world welfare as well as total output and consumer surplus. We then derive precise conditions for free trade to raise a country's welfare,...

Following the failure of multilateral trade negotiations at the Cancun meeting and the Doha Round, developing countries have pursued an alternative in so-called "south-south" trade agreements. Since these agreements lead to trade diversion from efficient north (developed) countries to less...

Globalization disrupted the seemingly solid construction emerged in the aftermath of WW II, called the international trade system. For over fifty years, the system grew constantly thanks to the increasing number of countries that joint it as well as to its ubiquitously-accepted rules. For better...

In the standard Krugman (1979) non-CES trade model, several asymmetric countries typically lose from increasing trade costs. However, all countries transiently benefit from such increase at the moment of closing trade, under almost-prohibitive trade costs (i.e., near autarky, which is possible...

For developing countries, a technological catch-up is sometimes a prerequisite for endorsement of trade agreements. This paper compares sequential trade liberalization through a preferential trade agreement (PTA) and one-shot multilateral trade liberalization with respect to the speed with which...

Neither of the major negotiations underway in the Asia-Pacific region, the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership, includes both China and the United States. By failing to connect these economies, these agreements would leave much of the economic and...

Constructing a two-agent model of international duopoly with increasing returns, the present paper examines potential gains from free trade. It is shown that under certain conditions, both agents in a country become worse off in free trade than in autarky with no redistribution. Further, the...