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

Brati Sankar Chakraborty ()
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Brati Sankar Chakraborty: Indian Statistical Institute

Chapter Chapter 15 in International Trade, Resource Mobility and Adjustments in a Changing World, 2024, pp 325-338 from Springer

Abstract: 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.

Keywords: Home market effect; Increasing returns; Monopolistic competition; Tariff; Unemployment; F12; F13; F16 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/978-981-97-5652-0_15

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