| Publications [#239245] of Edward Tower
search www.econ.duke.edu.Journal Articles
- Gokcekus, O; Tower, E, Does Trade liberalization benefit young and old alike?,
Review of International Economics, vol. 6 no. 1
(January, 1998),
pp. 50-58, WILEY, ISSN 0965-7576 [doi]
(last updated on 2024/08/25)
Abstract: In an overlapping generations model, capital and labor produce two tradable goods. A kleptocratic government spends the tariff revenue. Trade liberalization benefits the retired generation if and only if the relative price of the capital-intensive good rises. Starting from autarky, a small liberalization benefits subsequent generations if and only if it hurts the retired one, a result reminiscent of the Stolper-Samuelson theorem. However, the terms-of-trade effect means a large liberalization may simultaneously raise the welfare of all generations.
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