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Trade Policies and Industrialisation

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  • RODNEY E. FALVEY

Abstract

In this paper, the three‐commodity model of Gruen and Corden is used to examine the effects of import restriction policies designed to promote industrial development. It is shown that under circumstances which might reasonably be expected to exist in developing economies such policies will likely appear successful in the short run, but may fail in the long run, if the import‐competing sector's expansion is largely achieved by the diversion of resources from an infant manufacturing sector producing exportables. An export subsidy is the more appropriate policy under these circumstances.

Suggested Citation

  • Rodney E. Falvey, 1978. "Trade Policies and Industrialisation," The Economic Record, The Economic Society of Australia, vol. 54(2), pages 256-260, August.
    • Handle: RePEc:bla:ecorec:v:54:y:1978:i:2:p:256-260
    DOI: 10.1111/j.1475-4932.1978.tb00335.x
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    References listed on IDEAS

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    1. Mussa, Michael, 1974. "Tariffs and the Distribution of Income: The Importance of Factor Specificity, Substitutability, and Intensity in the Short and Long Run," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1191-1203, Nov.-Dec..
    2. Corden, W M & Findlay, Ronald, 1975. "Urban Unemployment, Intersectoral Capital Mobility and Development Policy," Economica, London School of Economics and Political Science, vol. 42(165), pages 59-78, February.
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