The Welfare Effects of Globalization with Labor Market Regulation I examine how globalization affects wages and welfare in a general equilibrium model of international trade with partly oligopolistic markets. Globalization is modeled as reducing trade costs or opening up shielded sectors to trade. There is a national or international common agency that determines minimum wages for the oligopoli...

Why Corporate Taxes May Rise: The Case of Trade Liberalization and Foreign Ownership* Almost all the literature on tax competition in the presence of multinationals (MNCs) and profit shifting ignores trade costs. This Paper studies how economic integration, in terms of reduced trade costs and internationalization of ownership, affects tax competition and equilibrium corporate taxes. We find tha...

We consider the effects a public revelation of information (e.g. rating, grade) has on trading in a dynamic signaling model. Competing buyers offer prices to a privately informed seller who can reject them and delay trade. Delay is costly and the seller has no commitment to its duration. The external public information allows for signaling in equilibrium. More interestingly, we characterize the...

We study price formation in securities markets, using the sequential trade framework of Glosten and Milgrom (1985). This paper makes one basic methodological advance over previous research on sequential securities trading: we allow traders to choose from n trade sizes in a multi-period market, where n can be arbitrarily large. We examine how trade size multiplicity affects the intertemporal dyn...

According to the “smooth adjustment hypothesis”, the labour-market adjustment costs entailed by trade liberalisation are lower if trade expansion is intra-industry rather than interindustry in nature. In this paper, we study the link between trade and labour market changes in UK manufacturing industries during the 1980s. We use industry-level measures of unemployment duration and wage variabili...

I use bilateral import data to test for the role of trade costs and asset market frictions in impeding international consumption risk sharing. Trade costs play a significant role. I do not reject the null of optimal risk sharing within OECD countries, though I do reject for the world as a whole. I calculate the impact on ex-post welfare of moving from historical asset market frictions to optima...

We argue that compensating losers is more difficult for immigration than for trade and capital movements. While a tax-cum-subsidy mechanism allows the government to turn the gains from trade into a Pareto improvement, the same is not true for the so-called immigration surplus, if the redistributive mechanism is not allowed to discriminate against migrants. We discuss policy conclusions to be dr...

We consider the estimation of the usual Gravity model of trade, which involves flows of trade, say exports, from country i to country j in time period t. We suggest an easy-to-impliment generalised method of moments estimator that avoids the issues associated with the usual fixed effects treatment of the unobserved heterogeneity in this type of models and at the same time provides consistent pa...

w hether the united kingdom (uk) should remain in the european :union: (eu) or not has been a fiercely debated issue both before and after the referendum in the uk on june 23, 2016. the main purpose of this paper is to evaluate the pros and cons of the uk leaving the eu. it is concluded that if the uk leaves the eu, the resulting economic shock would risk adverse effects on macroeconomic variab...

Vertical specialization (VS) trade, trade in goods that incorporate imported inputs, has grown rapidly since the 1960s. While the share of trade in inputs has not increased, the types of inputs traded have shifted from raw materials to manufactured parts. I argue that declining trade costs are an important explanation for these facts. I present a three stage vertical specialization trade model,...