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Question
If two countries are identical in size, population, number of firms, type of products, technology levels, factor endowments, skill distribution of their work force etc. under what circumstances they trade with each other? What would be the gains, if any, to their economies? What kind of problems they may face in the short run and do these problems are sustained in the long run? Which trade theory fits well in explaining the above situation?
Consider the inflow of 125.000 refugees to Florida from Cuba in 1980 and the migration of 670.000 Russian Jews to Israel during six years following the fall of Berlin Wall. What was the effect of those incidents to the labor markets of recipient countries in the short run as well as in the long run? Are there any similarities to the recent Syrian migration to Germany?
What would you expect in the labor market of the U.S. in terms of Relative Demand for High-skilled/Low-Skilled Labor Demand to happen if President Trump brings jobs back home? Explain the effects of suggested policy change with regard to foreign outsourcing/offshoring?
What factors are at work for a Large Home country to determine an optimal tariff?