The authors study a simple model of tariff wars and trade deals in which government revenue collection and disbursement uses resources. The introduction of costly governments leads to lower non-cooperative tariffs, the possibility that a less costly government may win a tariff war, and fully...

Concern about globalization has rekindled interest in a longstanding issue--the implications for macroeconomic stability of alternative monetary/exchange-rate policies. This paper re-examines the issue, and it assesses the robustness of several recommendations by comparing the results of a...