EconPapers    
Economics at your fingertips  
 

Offshoring Barriers, Regulatory Burden and National Welfare

Subhayu Bandyopadhyay (), Arnab Basu (), Nancy Chau () and Devashish Mitra ()

No 2018-3, Working Papers from Federal Reserve Bank of St. Louis

Abstract: We present a model which considers both regulatory burden of offshoring barriers and possible terms of trade gains from such barriers. Non-tariff barriers are shown to be unambiguously welfare-reducing, and tariff barriers raise welfare only when associated terms-of-trade gains exceed resulting regulatory burdens, in which case there is a positive optimal offshoring tax. Otherwise, free trade is optimal. Welfare reductions from an offshoring tax are more likely with several developed nations engaging in offshoring. We derive and characterize the Nash equilibrium in such a case.

Keywords: Offshoring tax; labor market; terms of trade (search for similar items in EconPapers)
JEL-codes: F1 H8 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2018-01-16
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://files.stlouisfed.org/files/htdocs/wp/2018/2018-003.pdf Full text (application/pdf)
https://doi.org/10.20955/wp.2018.003 https://doi.org/10.20955/wp.2018.003 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:2018-003

Ordering information: This working paper can be ordered from

DOI: 10.20955/wp.2018.003

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of St. Louis Contact information at EDIRC.
Bibliographic data for series maintained by Anna Oates ().

 
Page updated 2019-10-16
Handle: RePEc:fip:fedlwp:2018-003