| Sumario: | A three-sector general equilibrium model is used to study the implications of an increase in content protection under the assumption of variable labour supply (VLS). The role of VLS is highlighted in the paper. An increase in domestic content requirements increases the equilibrium labour supply, which magnifies the policy effects on the output levels (of agricultural, manufacturing, and intermediate goods) and the imports of foreign intermediates. Furthermore, the policy change may increase the national income of the economy while the national welfare is decreased. Reprinted by permission of the publisher.
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