Why Industrial Policies Fail: Limited Commitment
AbstractThe strategic effects of subsidies on output and subsidies on investment differ substantially in dynamic models where a government's commitment ability is limited. Output subsidies remain effective even as the period of commitment vanishes but investment subsidies may become completely ineffective. This difference has been obscured because most existing models of strategic trade policy are static. Copyright 1995 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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Bibliographic InfoArticle provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.
Volume (Year): 36 (1995)
Issue (Month): 4 (November)
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Other versions of this item:
- Karp, Larry & Perloff, Jeffrey, 1990. "Why Industrial Policies Fail: Limited Commitment," CEPR Discussion Papers 450, C.E.P.R. Discussion Papers.
- Karp, Larry & Perloff, Jeffrey M, 1993. "Why Industrial Policies Fail: Limited Commitment," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt8ss076xw, Department of Agricultural & Resource Economics, UC Berkeley.
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
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