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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.

Suggested Citation

  • Udo Kreickemeier, 2005. "Unemployment and the welfare effects of trade policy," Canadian Journal of Economics, Canadian Economics Association, vol. 38(1), pages 194-210, February.
  • Handle: RePEc:cje:issued:v:38:y:2005:i:1:p:194-210
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    Citations

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    Cited by:

    1. Rod Falvey & Udo Kreickemeier, 2017. "Tariff Reforms with Rigid Wages," World Scientific Book Chapters,in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 4, pages 95-116 World Scientific Publishing Co. Pte. Ltd..
    2. Fabio Antoniou & Panos Hatzipanayotou & Nikos Tsakiris, 2015. "Destination vs. Origin-based Commodity Taxation in Large Open Economies with Unemployment," CESifo Working Paper Series 5585, CESifo Group Munich.
    3. Chi-Chur Chao & Eden Siu Hung Yu, 2014. "Special Issue: Issues in Asia. Guest Editor: Laixun Zhao," Review of Development Economics, Wiley Blackwell, vol. 18(2), pages 195-202, May.
    4. Chi-Chur Chao & Bharat R. Hazari & Eden S. H. Yu, 2010. "Quotas, Spillovers, and the Transfer Paradox in an Economy with Tourism," Review of International Economics, Wiley Blackwell, vol. 18(2), pages 243-249, May.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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