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Tariff that Exports Unemployment: Home Market Effect Meets Shapiro and Stiglitz

In: International Trade, Resource Mobility and Adjustments in a Changing World

Author

Listed:
  • Brati Sankar Chakraborty

    (Indian Statistical Institute)

Abstract

This note points towards an important omission in the literature of trade with increasing returns to scale, and equilibrium unemployment as in shirking type models. The general consensus appears to be that free trade via proliferation of varieties is likely to increase real wage and thus relaxing the no-shirking constraint should increase employment. Upon recognising the presence of transport cost, this note shows otherwise.

Suggested Citation

  • Brati Sankar Chakraborty, 2024. "Tariff that Exports Unemployment: Home Market Effect Meets Shapiro and Stiglitz," Contributions to Economics, in: Sugata Marjit & Biswajit Mandal (ed.), International Trade, Resource Mobility and Adjustments in a Changing World, chapter 0, pages 325-338, Springer.
    • Handle: RePEc:spr:conchp:978-981-97-5652-0_15
    DOI: 10.1007/978-981-97-5652-0_15
    as

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