This paper examines the welfare implications of temporary foreign aid in a simple two-period, two-country model of trade. Domestic investment is endogenous, providing an important link between aid in period one and the terms of trade in periods one and two. Transfer-induced changes in the terms...

We develop a political-economic model of foreign aid allocation. Each ethnic group in the donor country lobbies the government to allocate more aid to its country of origin, and the government accepts political contributions from lobby groups. Initial per-capita income of the recipients and...

The effect on national welfare of uneven technical progress and eli mination of a firm is analyzed under the existence of a Cournot oligopolistic sector. An increase in the share of an inefficient firm, owing to its innovations, results in a shift of production from more efficient firms to the...

The authors develop a partial equilibrium model of foreign direct investment (FDI) in which identical foreign firms locate themselves in a host country to compete in an oligopolistic market for a nontradeable commodity. The host country, assumed to be small in the market for FDI, makes use of...

It is generally believed that, in the absence of retaliation, a country can enhance its welfare by dumping its product on another country. Antidumping policies, in the form of countervailing duties, are usually introduced by the dumped-upon countries. In this paper, the authors show that it may...