In this paper, the authors employ a three-country, two-good, general equilibrium model to analyze bilateral quota wars. It is shown that the presence of a third country or a number of countries that trade freely leads to fundamentally different results of retaliation: bilateral quota wars need...

We explore theoretically and empirically the relationship between intraindustry trade and the skill premium. Our model features a Chamberlinian-type mechanism of income distribution based on quasi-homothetic consumer preferences, non-homothetic production, and factor-biased scale economies at...