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Title: |
Protectionism and Wage Resistance: A Two
Country Analysis |
| Author: |
Yip, Chong K. |
| Author
Affiliation: |
GA State U |
| Source: |
International Economic Journal, Summer 1992, v. 6, no. 2, pp. 27-40 |
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Publication Date: |
Summer 1992 |
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Abstract: |
This paper examines the macroeconomic
effects of tariffs in a two-country monetary optimizing model. With
universal real wage rigidity, a tariff is likely to be more
contractionary, (1) the larger the proportion of the labor force
employed in the exportable sector, (2) the smaller the share of
expenditure on the exportable, and (3) the lower (higher) the employment
elasticity in the importable (exportable) industry. Under complete
specialization in production, a tariff is contractionary domestically
and beggar-thy-neighbor internationally, independent of the foreign wage
behavior. |
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