We study a model in which management and a union bargain over a rule that will later determine the level of employment, and over a wage. The government then chooses an output or an employment subsidy. An exogenous natural turnover rate in the unionised sector creates unemployment whenever the...

Partial cooperation in setting trade and industrial policies may not benefit members of a customs union if exporters outside the union react aggressively. Even if the union comprises the entire noncompetitive sector of industry, cooperation on trade policy may be disadvantageous if industrial...

Government policies designed to give domestic exporters a strategic advantage in world markets are completely effective only if the government can commit to those policies for as long as they affect firms' decisions. Export subsidies or other output policies that affect firms only in the current...

Polish economic data are assembled in order to assess the impact on the agricultural sector of the recent reforms. Evidence of recovery in this sector is slight, but the decline seems to have halted. Policy issues for agricultural reform are discussed, emphasizing regulation of monopolistic...

We analyse a model in which a government uses a second-best policy to affect the reallocation of labour, following a change in relative prices. We consider two extreme cases, in which the government has either unlimited or negligible ability to commit to future actions. We explain why the...

Management and a union bargain sequentially, first choosing a contract which will later determine the level of employment, and those choosing a wage. The government then chooses an output subsidy, after which the industry chooses employment according to the contract. The presence of a natural...

We characterize the open-loop and the Markov-Perfect Stackelberg equilibria for a differential game in which a cartel and a fringe extract a non-renewable resource. Both agents have stock dependent costs. The comparison of initial market shares, across different equilibria, depends on which firm...

If a regulator is unable to measure firms’ individual emissions, an ambient tax can be used to achieve the socially desired level of pollution. With this tax, each firm pays a unit tax on aggregate emissions. In order for the tax to be effective, firms must recognize that their decisions...

We study a dynamic regulation model where firms’ actions contribute to a stock externality. The regulator and firms have asymmetric information about serially correlated abatement costs. With price-based policies such as taxes, or if firms trade quotas efficiently, the regulator learns about...

The standard solution of the open-loop optimal import tariff is normally time inconsistent. This paper shows why and derives the dynamically consistent Markov perfect tariff. The two tariffs are compared; they differ except for a special class of import demands. The time paths of tariffs and the...