Protection for Sale with Unemployment
نویسنده
چکیده
To match the observed patterns of protection over business cycle, I add unemployment into two models of trade policy: Protection for Sale(1994) and Trade Wars and Trade Talks(1995) by Grossman and Helpman. The source of unemployment is nancial frictions: as in Aghion et.al. (2009) rms with pro ts less than a random threshold are liquidated. With small shocks protection goes up to save employment and e¢ cient rms. With large shocks protection can go down, that is consistent with hump-shape pattern in the literature on declining industries. I also provide a simpli ed numerical example and ideas how to estimate and calibrate the model.
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تاریخ انتشار 2014