The paper explores the efficiency consequences of using temporary protection to ease adjustment following an unexpected, permanent improvement in a country's terms of trade. In the model, workers trade off the potentially higher wage that the export sector has to offer with a lower job...

We present a two-good, two-country overlapping generations model where emissions arise from production and each country has a domestic emission permit system. When one country unilaterally reduces her cap on emissions, her output available for domestic and foreign consumption diminishes more...