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Article
Strategic Quotas on Foreign Investment and Migration
Economic Theory
  • Reza Oladi, Utah State University
Document Type
Article
Publication Date
1-1-2004
Abstract

A basic two-country, single commodity model is considered to formulate the interactive and retaliative policies with regard to restrictions on foreign investment and labor migration. We model quota retaliations using the contingent threat situation. Under three different strategic environments, we characterize the stable quotas on factor movements. Among other things, we illustrate that either one of the two countries may end up with welfare loss- Ramaswami trap, a concept we introduce in this paper.

Citation Information
“Strategic Quotas on Foreign Investment and Migration,” Economic Theory 24, 2004, 289-307.