Yang, Xiaokai; Zhang, Dingsheng - In: Annals of Economics and Finance 1 (2000) 1, pp. 211-230
This paper develops a general equilibrium model with transaction costs and endogenous and exogenous comparative advantages. The governments are allowed to choose between tariff war, tariff negotiation, and a {\it laissez faire} regime. It shows that the level of the division of labor and trade...