Trade Liberalization in Oligopolistic Competition with Unemployment: A General Equilibrium Analysis
Abstract
This paper examines the short- and long-run effects of partial trade liberalization through relaxation of quantity restrictions in an oligopolistically competitive economy with unemployment. While the short-run effects of the liberalization policy are ambiguous, its long-run impacts are clear: the policy dampens the price of the imported goods, raises firms' output, and reduces the number of firms. Furthermore, the policy lowers the unemployment ratio and hence improves welfare when the economy suffers from sector-specific unemployment, whereas the policy may aggravate underemployment and thus may lower welfare for a labor-surplus economy.Download Info
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Bibliographic Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 30 (1997)
Issue (Month): 2 (May)
Pages: 479-96
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Marjit, Sugata & Kar, Saibal & Beladi, Hamid, 2007. "Protectionary bias in agriculture: A pure economic argument," Ecological Economics, Elsevier, vol. 63(1), pages 160-164, June.
- Janeba, Eckhard, 2007. "Exports, unemployment and the welfare state," Center for European, Governance and Economic Development Research Discussion Papers 60, University of Goettingen, Department of Economics.
- M. Ali Khan, 2007. "The Harris-Todaro Hypothesis," Labor Economics Working Papers 22206, East Asian Bureau of Economic Research.
- Anwar, Sajid, 2008. "Factor mobility, wage inequality and welfare," International Review of Economics & Finance, Elsevier, vol. 17(4), pages 495-506, October.
- Choi, E. Kwan, 2007.
"North-South trade and income inequality,"
International Review of Economics & Finance,
Elsevier, vol. 16(3), pages 347-356.
- Choi, E. Kwan, 2007. "North-South Trade and Income Inequality," Staff General Research Papers 12788, Iowa State University, Department of Economics.
- Anwar, Sajid & Rice, John, 2009. "Labour mobility and wage inequality in the presence of endogenous foreign investment," Economic Modelling, Elsevier, vol. 26(6), pages 1135-1139, November.
- Khan, M. Ali Khan, 2007. "The Harris-Todaro Hypothesis," MPRA Paper 2201, University Library of Munich, Germany.
- Eckhard Janeba, 2009.
"Exports, unemployment, and the welfare state,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 42(3), pages 930-955, August.
- Eckhard Janeba, 2007. "Exports, Unemployment and the Welfare State," CESifo Working Paper Series 1977, CESifo Group Munich.
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