Phasing In And Phasing Out Protectionism With Costly Adjustments Of Labour
AbstractWe study the dynamics of optimal trade policy in a model with costly inter-sectoral adjustment of labour, where migrants pay less than the marginal social cost of migration. If workers have rational expectations, a future tariff has an announcement effect on the current migration decision. If the government is able to commit itself to future policy, the optimal trajectory involves phasing in and then phasing out protection of the dying sector. This contrasts with recommendations of gradual liberalization. Without the ability to make commitments, the equilibrium policy begins with and maintains free trade.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Agricultural Trade Research Consortium in its series Working Papers with number 51112.
Date of creation: 1993
Date of revision:
adjustment costs; dynamic tariffs; time inconsistency; Markov perfection; International Relations/Trade;
Other versions of this item:
- Karp, Larry & Paul, Thierry, 1994. "Phasing In and Phasing Out Protectionism with Costly Adjustment of Labour," Economic Journal, Royal Economic Society, vol. 104(427), pages 1379-92, November.
- Karp, Larry & Paul, Thierry, 1993. "Phasing in and Phasing Out Protectionism with Costly Adjustment of Labour," CEPR Discussion Papers 856, C.E.P.R. Discussion Papers.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Alvaro Forteza & Rossana Patrón, 2003.
"Trade Liberalisation with Costly Adjustment,"
Journal of Applied Economics,
Universidad del CEMA, vol. 0, pages 95-125, May.
- Larry Karp & Thierry Paul, 2005.
"Intersectoral Adjustment and Policy Intervention: the Importance of General-Equilibrium Effects,"
Review of International Economics,
Wiley Blackwell, vol. 13(2), pages 330-355, 05.
- Karp, Larry & Paul, Thierry, 2002. "Intersectoral Adjustment and Policy Intervention: the Importance of General Equilibrium Effects," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7rk3z9w1, Department of Agricultural & Resource Economics, UC Berkeley.
- Karp, Larry S. & Theirry, Paul, 2002. "Intersectoral Adjustment and Policy Intervention: the Importance of General Equilibrium Effects," CUDARE Working Paper Series 893R, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Karp, Larry, 1995. "The Direction and Timing of Agricultural Trade Refonn in Central and East Europe," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt9z61f67x, Department of Agricultural & Resource Economics, UC Berkeley.
- Terra, Maria Cristina T., 1999. "Tariff design with varying degrees of commitment," Journal of Development Economics, Elsevier, vol. 58(1), pages 123-147, February.
- Steigum, E. & Thogersen, O., 1998.
"Borrow and Adjust. Fiscal Policy and Sectoral Adjustment in an Open Economy,"
28/98, Norwegian School of Economics and Business Administration-.
- Erling Steigum & �ystein Th¯gersen, 2003. "Borrow and Adjust: Fiscal Policy and Sectoral Adjustment in an Open Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 699-724, 05.
- Erling Steigum & Øystein Thøgersen, 2001. "Borrow and Adjust: Fiscal Policy and Sectoral Adjustment in an Open Economy," CESifo Working Paper Series 583, CESifo Group Munich.
- Shubham Chaudhuri & John McLaren, 2007. "Some Simple Analytics of Trade and Labor Mobility," NBER Working Papers 13464, National Bureau of Economic Research, Inc.
- Batabyal, Amitrajeet A. & Beladi, Hamid, 2002. "A dynamic analysis of protection and environmental policy in a small trading developing country," European Journal of Operational Research, Elsevier, vol. 143(1), pages 197-209, November.
- Erhan Artuç & Shubham Chaudhuri & John McLaren, 2007.
"Delay and Dynamics in Labor Market Adjustment: Simulation Results,"
KoÃ§ University-TUSIAD Economic Research Forum Working Papers
0703, Koc University-TUSIAD Economic Research Forum.
- Artuç, Erhan & Chaudhuri, Shubham & McLaren, John, 2008. "Delay and dynamics in labor market adjustment: Simulation results," Journal of International Economics, Elsevier, vol. 75(1), pages 1-13, May.
- Shubham Chaudhuri & Erhan Artuç & John McLaren, 2003. "Delay and dynamics in labor market adjustment: Simulation results," Discussion Papers 0304-07, Columbia University, Department of Economics.
- Stephen Cameron & Shubham Chaudhuri & John McLaren, 2007. "Trade Shocks and Labor Adjustment: Theory," NBER Working Papers 13463, National Bureau of Economic Research, Inc.
- Didier LAUSSEL & Philippe MICHEL & Thierry Paul, 2004. "Intersectoral adjustment and unemployment in a two-country Ricardian model," Discussion Papers (REL - Recherches Economiques de Louvain) 2004023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.