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Second Best Redistributive Policies : the Case of International Trade

  • Guesnerie, R.

The paper presents a brief review of recent work that focuses on the normative economics of international trade. In an Heckscher Ohlin - like economy, with skilled and unskilled workers, the available redistributive tools, (that include income taxation) are not powerful enough to allow the separation of efficiency and equity issues and "production efficiency" is no longer desirable. At a social optimum that calls for redistribution towards the unskilled workers, the social value of the unskilled intensive good is necessarily smaller than its production price. This finding allows to unify existing results and suggests conjectures.

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Paper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 2000-21.

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Length: 12 pages
Date of creation: 2000
Date of revision:
Publication status: Published in Journal of Theoretical Public Economics, 2001, 3 (1), pp.15-26.
Handle: RePEc:del:abcdef:2000-21
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