Pethig, Rüdiger; Kolleß, Frieder - CESifo - 2009
welfare. They account for tax base responses to their tax and take as given the world-market interest rate. We specify … conditions under which - in contrast to free trade with undistorted labor markets - welfare declines and unemployment increases …In a multi-country general equilibrium economy with mobile capital and rigid-wage unemployment, countries may differ in …