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Optimal trade policy with monopolistic competition and heterogeneous firms

Abstract:

This paper derives optimal trade and domestic taxes for a small open economy containing a monopolistically competitive (MC) sector in which firms may have heterogeneous productivity levels. Analysis encompasses cases in which the domestic MC sector is able to expand or contract flexibly, or is constrained to be of fixed size. In the former case domestic protection can bring gains by increasing the number of product varieties on offer; these gains (and the corresponding rates of domestic subsi...

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Publication status:
Published
Peer review status:
Peer reviewed
Version:
Accepted manuscript

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Publisher copy:
10.1016/j.jinteco.2016.06.004

Authors


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Institution:
University of Oxford
Department:
Oxford, SSD, Economics, OxCarre
Haaland, J More by this author
Publisher:
Elsevier Publisher's website
Journal:
Journal of International Economics Journal website
Volume:
102
Pages:
85-95
Publication date:
2016-07-05
DOI:
EISSN:
1873-0353
ISSN:
0022-1996
URN:
uuid:ec34f348-67a1-46d2-b9fd-73e98893b83b
Source identifiers:
630225
Local pid:
pubs:630225

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