In the two-country Melitz (2003) model, unilateral trade liberalization is often cast as a reduction of iceberg transportation costs and wages are determined by a linear outside sector. We show that welfare results reverse when wages adjust and trade frictions are revenue-generating tariffs.
机构:
Department of Public Finance, National Taipei University, 67, Sec. 3, Min-Sheng E. Road, Taipei, TaiwanDepartment of Public Finance, National Taipei University, 67, Sec. 3, Min-Sheng E. Road, Taipei, Taiwan
Lai Y.-B.
Hu C.-H.
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机构:
Department of Public Finance, National Taipei University, 67, Sec. 3, Min-Sheng E. Road, Taipei, TaiwanDepartment of Public Finance, National Taipei University, 67, Sec. 3, Min-Sheng E. Road, Taipei, Taiwan