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Jobs, Jobs, Jobs: A "New" Perspective on Protectionism

  • Arnaud Costinot

This paper analyzes the determinants of protectionism in a small open economy with search frictions. In this environment, jobs generate rents whose access depends on the level of trade protection. By raising the domestic price of a good, a government may attract more firms in a particular industry. This raises the probability that workers will find jobs in this sector, and in turn, will benefit from the associated rents. Though simple, this channel may help explain a variety of stylized facts on the structure of trade protection and individual trade-policy preferences. (JEL: F130, F160) (c) 2009 by the European Economic Association.

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Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 7 (2009)
Issue (Month): 5 (09)
Pages: 1011-1041

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Handle: RePEc:tpr:jeurec:v:7:y:2009:i:5:p:1011-1041
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