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Protection, the Wage Response and Exchange Rate Dynamics: A Two-Country Analysis

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  • Søren Bo Nielsen

    (Institute of Economics, University of Copenhagen)

Abstract

This paper studies the relation between trade policy and macroeconomic variables in a flexible exchange rate world. Applying a symmetric two-country model, we determine the effects of a tariff on the exchange rate, employment and real income at home and abroad, taking explicitly into account exchange rate dynamics and either nominal or real wage strickiness.

Suggested Citation

  • Søren Bo Nielsen, 1988. "Protection, the Wage Response and Exchange Rate Dynamics: A Two-Country Analysis," Discussion Papers 88-12, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:8812
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