Inward-looking policies, finite change, and employment: The capital reallocation effect
International Journal of Economic Theory
; 19(1):62-76, 2023.
Article
in English
| Scopus | ID: covidwho-2243110
ABSTRACT
It is well recognized that there emerged a trend of inward-looking trade policies even before the COVID pandemic crippled the world. These were reflected in both BREXIT and US-China trade conflicts. As countries become inward-oriented, usually local prices start rising. With this backdrop, this paper explores how rising local prices are likely to affect employment in the short and long runs when we accommodate for the finite change in a general equilibrium structure whereby sectors not only contract but might also close down altogether due to the capital reallocation effect following a price incentive. © 2022 International Association for Economic Theory.
Full text:
Available
Collection:
Databases of international organizations
Database:
Scopus
Type of study:
Experimental Studies
Language:
English
Journal:
International Journal of Economic Theory
Year:
2023
Document Type:
Article
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