Does Trade liberalization benefit young and old alike?

Journal Article (Journal Article)

In an overlapping generations model, capital and labor produce two tradable goods. A kleptocratic government spends the tariff revenue. Trade liberalization benefits the retired generation if and only if the relative price of the capital-intensive good rises. Starting from autarky, a small liberalization benefits subsequent generations if and only if it hurts the retired one, a result reminiscent of the Stolper-Samuelson theorem. However, the terms-of-trade effect means a large liberalization may simultaneously raise the welfare of all generations.

Full Text

Duke Authors

Cited Authors

  • Gokcekus, O; Tower, E

Published Date

  • January 1, 1998

Published In

Volume / Issue

  • 6 / 1

Start / End Page

  • 50 - 58

International Standard Serial Number (ISSN)

  • 0965-7576

Digital Object Identifier (DOI)

  • 10.1111/1467-9396.00086

Citation Source

  • Scopus