Most real-world trade liberalizations decrease tariffs and increase quotas without completely abolishing them. We ask how decreases in tariffs and increases in quotas affect productivity in an economy with monopoly rights in the import-competing sector. We show that a reduction in a tariff can...

We ask for which part of the observed cross-country differences in the level of per-capita income monopoly rights can account. We answer this question in a calibrated growth model with capital. Monopoly rights in the capital-producing sector shield labor market insiders from the competition by...