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Comparative Advantage and Optimal Trade Policy
Costinot, Arnaud - 2013
The theory of comparative advantage is at the core of neoclassical trade theory. Yet we know little about its …
Persistent link: https://www.econbiz.de/10013071911
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Export Subsidies and International Market Share Rivalry
Brander, James A.; Spencer, Barbara J. - 2021
Countries often perceive themselves as being in competition with each other for profitable international markets. In such a world export subsidies can appear as attractive policy tools, from a national point of view, because they improve the relative position of a domestic firm in noncooperative...
Persistent link: https://www.econbiz.de/10013220967
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Free Trade vs. Strategic Trade : A Peek into Pandora'S Box
Grossman, Gene M.; Maggi, Giovanni - 2021
We investigate whether a welfare-maximizing government ought to pursue a program of" strategic trade intervention or instead commit itself to free trade when domestic firms will have an opportunity to manipulate the government's choice of the level of" intervention. Domestic firms may overinvest...
Persistent link: https://www.econbiz.de/10013222625
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Rent-Shifting Export Subsidies with an Imported Intermediate Product
Ishikawa, Jota; Spencer, Barbara J. - 2021
This paper argues that export subsidies aimed at shifting rents from foreign to domestic producers of a final good may also serve to shift rents to foreign firms supplying an intermediate good, weakening the incentive for the subsidy. By contrast, assuming Cournot competition for both the final...
Persistent link: https://www.econbiz.de/10013225571
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Strategic Export Subsidies and Reciprocal Trade Agreements : The Natural Monopoly Case
Bagwell, Kyle; Staiger, Robert W. - 2021
Why do governments seek restrictions on the use of export subsidies through reciprocal trade agreements such as GATT? With existing arguments, it is possible to understand GATT's restrictions on export subsidies as representing an inefficient victory of the interests of exporting governments...
Persistent link: https://www.econbiz.de/10013237015
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Capital Subsidies and Countervailing Duties in Oligopolistic Industries
Spencer, Barbara J. - 2021
Under GATT, countries are allowed to impose countervailing duties to offset foreign subsidies. However GATT rules limit the amount of duty to the amount of the subsidy. This paper examines a generalized model of imperfect competition with capital subsidies and shows the conditions under which a...
Persistent link: https://www.econbiz.de/10013227056
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Strategic Trade, Competitive Industries and Agricultural Trade Disputes
Bagwell, Kyle; Staiger, Robert W. - 2021
The primary predictions of strategic-trade theory are not restricted to imperfectly-competitive markets. Indeed, these … predictions emerge in a natural three-country extension of the traditional theory of trade policy in competitive markets, once the … theory is augmented to allow for politically-motivated governments, so that the sign of export policy may be converted from …
Persistent link: https://www.econbiz.de/10013227741
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Firm Entry, Trade, and Welfare in Zipf's World
di Giovanni, Julian - 2010
Firm size follows Zipf's Law, a very fat-tailed distribution that implies a few large firms account for a disproportionate share of overall economic activity. This distribution of firm size is crucial for evaluating the welfare impact of economic policies such as barriers to entry or trade...
Persistent link: https://www.econbiz.de/10013138768
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The Interaction and Sequencing of Policy Reforms
Asturias, Jose - 2016
In what order should a developing country adopt policy reforms? Do some policies complement each other? Do others substitute for each other? To address these questions, we develop a two-country dynamic general equilibrium model with entry and exit of firms that are monopolistic competitors. The...
Persistent link: https://www.econbiz.de/10013001790
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Market Penetration Costs and the New Consumers Margin in International Trade
Arkolakis, Costas - 2008
I develop a new theory of marketing costs and introduce it into a model of trade with product differentiation and firm …
Persistent link: https://www.econbiz.de/10012770681