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Second Best Redistributive Policies: The Case of International Trade

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 Guesnerie, Roger

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Abstract

The paper presents a brief review of recent work that focuses on the normative economics of international trade. In a Heckscher-Ohlin-like economy, with skilled and unskilled workers, the available redistributive tools (that include income taxation) are not powerful enough to allow the separation of efficiency and equity issues, and "production efficiency" is no longer desirable. At a social optimum that calls for redistribution toward the unskilled workers, the social value of the unskilled intensive good is necessarily smaller than its production price. This finding allows us to unify existing results and suggests conjectures. Copyright 2001 by Blackwell Publishing Inc.

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Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

Volume (Year): 3 (2001)
Issue (Month): 1 ()
Pages: 15-25
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Handle: RePEc:bla:jpbect:v:3:y:2001:i:1:p:15-25

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Rodrik, Dani, 1995. "Political economy of trade policy," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 28, pages 1457-1494 Elsevier. [Downloadable!] (restricted)
  2. David Spector, 1999. "Is it Possible to Redistribute the Gains from Trade Using Income Taxation?," Working papers 99-13, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Atkinson, A. B. & Stiglitz, J. E., 1976. "The design of tax structure: Direct versus indirect taxation," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 55-75. [Downloadable!] (restricted)
  4. Stiglitz, Joseph E., 1982. "Self-selection and Pareto efficient taxation," Journal of Public Economics, Elsevier, vol. 17(2), pages 213-240, March. [Downloadable!] (restricted)
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  5. Kevin H. O'Rourke & Jeffrey G. Williamson, 2001. "Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650592, December.
  6. Paul Krugman, 1995. "Growing World Trade: Causes and Consequences," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1995-1), pages 327-377. [Downloadable!]
  7. Dixit, Avinash & Norman, Victor, 1986. "Gains from trade without lump-sum compensation," Journal of International Economics, Elsevier, vol. 21(1-2), pages 111-122, August. [Downloadable!] (restricted)
  8. Guesnerie, R., 1998. "Peut-on toujours redistribuer les gains à la spécialisation et à l'echange? Un retour en pointillé sur Ricardo et Heckscher-Ohlin," DELTA Working Papers 98-07, DELTA (Ecole normale supérieure).
  9. Diamond, Peter A & Mirrlees, James A, 1971. "Optimal Taxation and Public Production: I--Production Efficiency," American Economic Review, American Economic Association, vol. 61(1), pages 8-27, March. [Downloadable!] (restricted)
  10. Guesnerie, Roger, 1979. "General statements on second best pareto optimality," Journal of Mathematical Economics, Elsevier, vol. 6(2), pages 169-194, July. [Downloadable!] (restricted)
  11. Peter A. Diamond & J. A. Mirrlees, 1968. "Optimal Taxation and Public Production," Working papers 22, Massachusetts Institute of Technology (MIT), Department of Economics.
  12. Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Blackwell Publishing, vol. 38(114), pages 175-208, April. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Martimort, David & Verdier, Thierry, 2009. "International Trade with Domestic Regulation under Asymmetric Information: A Simple General Equilibrium Approach," IDEI Working Papers 223, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  2. Hisahiro Naito, 2006. "Redistribution, production inefficiency and decentralized efficiency," International Tax and Public Finance, Springer, vol. 13(5), pages 625-640, September. [Downloadable!] (restricted)
    Other versions:
  3. Christian Keuschnigg & Evelyn Ribi, 2007. "Outsourcing, Unemployment and Welfare Policy," University of St. Gallen Department of Economics working paper series 2007 2007-41, Department of Economics, University of St. Gallen. [Downloadable!]
    Other versions:
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