We analyze the effects of factor taxes in a standard 2x2x2 model of international trade with internationally immobile factors, modified to allow for involuntary unemployment.
Factor taxes that increase employment are shown to be potentially welfare reducing in the open economy due to an induced negative terms of trade effect - a case that we label induced immiserising growth. In this case, there exists the potential for welfare increasing international coordination of factor taxes
Zeitraum
23 Sept. 2008 → 26 Sept. 2008
Ereignistitel
Jahrestagung 2008 des Vereins für Socialpolitik Gesellschaft für Wirtschaft- und Sozialwissenschaften