Redistributing Gains from Globalisation
AbstractThis paper analyses the effects of redistribution in a model of international trade with heterogeneous firms in which a fair-wage effort mechanism leads to firm-specific wage payments and involuntary unemployment. The redistribution scheme is financed by profit taxes and gives the same absolute lump-sum transfer to all workers. International trade increases aggregate income and income inequality, "ceteris paribus". If, however, trade is accompanied by a suitably chosen increase in the profit tax rate, it is possible to achieve higher aggregate income and a more equal income distribution than in autarky, provided that the share of exporters is sufficiently high. Copyright The editors of the "Scandinavian Journal of Economics" 2009 .
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Scandinavian Journal of Economics.
Volume (Year): 111 (2009)
Issue (Month): 4 (December)
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Web page: http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1467-9442
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- George Chouliarakis & Monica Correa-Lopez, 2012. "A Fair Wage Model of Unemployment with Inertia in Fairness Perceptions," Working Papers 1203, BBVA Bank, Economic Research Department.
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