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Protection And Real Rewards: Some Antinomies

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  • Brati Sankar Chakraborty

Abstract

. This paper develops a model with an increasing returns to scale sector and complementarities in production. It is shown that under a particular protectionist regime, the factor specific to the unprotected sector(s) might gain, along with the factor specific to the protected sector. Under such a regime the mobile factor is most severely hurt. Under another protectionist regime, it is shown that both the specific factors (even the factor specific to the protected sector(s)) might lose and the mobile factor gains unambiguously. Both these cases are in stark conflict with the conventional wisdom associated with the specific factors model.

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  • Brati Sankar Chakraborty, 2009. "Protection And Real Rewards: Some Antinomies," Pacific Economic Review, Wiley Blackwell, vol. 14(1), pages 56-70, February.
    • Handle: RePEc:bla:pacecr:v:14:y:2009:i:1:p:56-70
    DOI: 10.1111/j.1468-0106.2009.00435.x
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    References listed on IDEAS

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    1. Jones, Ronald W & Scheinkman, Jose A, 1977. "The Relevance of the Two-Sector Production Model in Trade Theory," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 909-935, October.
    2. Mayer, Wolfgang, 1974. "Short-Run and Long-Run Equilibrium for a Small Open Economy," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 955-967, Sept./Oct.
    3. 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..
    4. Marjit, Sugata & Beladi, Hamid, 1996. "Protection and the gainful effects of foreign capital," Economics Letters, Elsevier, vol. 53(3), pages 311-316, December.
    5. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
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    1. Ronald W. Jones, 2018. "Bubble Diagrams in Trade Theory," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 9, pages 137-152, World Scientific Publishing Co. Pte. Ltd..

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