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Unemployment and the welfare effects of trade policy

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  • Udo Kreickemeier

Abstract

In this paper the welfare effects of tariffs and import quotas in the presence of involuntary unemployment are derived and compared. The framework used is the standard model of a competitive small open economy with many goods and factors. Optimum levels of the respective trade policy instruments are derived, as well as welfare increasing reform strategies. In all cases, the labour intensity of the import-competing sectors turns out to be a crucial variable for deriving the welfare effects.

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Bibliographic Info

Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 38 (2005)
Issue (Month): 1 (February)
Pages: 194-210

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Handle: RePEc:cje:issued:v:38:y:2005:i:1:p:194-210

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Cited by:
  1. Rod Falvey & Udo Kreickemeier, 2009. "Tariff reforms with rigid wages," Economic Theory, Springer, vol. 41(1), pages 23-39, October.

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