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Protection, the Wage Response and Exchange Rate Dynamics: A Two-Country Analysis

Søren Nielsen

No 88-12, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: This paper studies the relation between trade policy and macroeconomic variables in a flexible exchange rate world. Applying a symmetric two-country model, we determine the effects of a tariff on the exchange rate, employment and real income at home and abroad, taking explicitly into account exchange rate dynamics and either nominal or real wage strickiness.

Pages: 23 pages
Date: 1988-09
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:8812

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