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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. JEL classification: F13, F16 Chômage et les effets de bien‐être de la politique commerciale. Ce mémoire dérive et compare les effets de bien‐être des droits de douane et des contingentements à l’importation quand il y a chômage involontaire. Le cadre d’analyse utilisé est le modèle standard d’une petite économie ouverte concurrentielle quand il y a plusieurs biens et facteurs de production. Les niveaux optimaux des instruments pour les diverses politiques commerciales sont dérivés, ainsi que les stratégies de réforme susceptibles d’accroître le niveau de bien‐être. Dans tous les cas, l’intensité de l’utilisation du travail dans les secteurs qui concurrencent les importations s’avère la variable cruciale dans la dérivation des effets de bien‐être.

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  • Udo Kreickemeier, 2005. "Unemployment and the welfare effects of trade policy," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(1), pages 194-210, February.
    • Handle: RePEc:wly:canjec:v:38:y:2005:i:1:p:194-210
    DOI: 10.1111/j.0008-4085.2005.00275.x
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    Cited by:

    1. Chi-Chur Chao & Bharat R. Hazari & Jean-Pierre Laffargue & Pasquale M. Sgro & Eden S. H. Yu, 2005. "Tourism, jobs, capital accumulation and the economy: A dynamic analysis," Working Papers halshs-00590811, HAL.
    2. 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..
    3. 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.
    4. 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.
    5. Fabio Antoniou & Panos Hatzipanayotou & Michael S. Michael & Nikos Tsakiris, 2022. "Tax competition in the presence of environmental spillovers," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(3), pages 600-626, June.
    6. Nikos Tsakiris & Panos Hatzipanayotou & Michael S. Michael, 2024. "Strategic capital taxation, tradable emission permits and global pollution," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 57(1), pages 276-296, February.
    7. Fabio Antoniou & Panos Hatzipanayotou & Nikos Tsakiris, 2019. "Destination‐based vs. Origin‐based Commodity Taxation in Large Open Economies with Unemployment," Economica, London School of Economics and Political Science, vol. 86(341), pages 67-86, January.
    8. 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.
    9. Nguyen, Ly & Kinnucan, Henry W., 2019. "The US solar panel anti-dumping duties versus uniform tariff," Energy Policy, Elsevier, vol. 127(C), pages 523-532.

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    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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