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Adjustability in production and dynamic effects of domestic competition policy

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  • Rui Ota
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Abstract

This study explores the effect on trade balance of suppressing competition in the domestic non-tradable sector through the interaction between the short-run adjustment and the long-run adjustment in production process. Constructing a model that can capture a more short-run aspect than Yano (2001), this study demonstrates that the effect depends on the factor intensity ranking between the tradable sector and the non-tradable sector. In this model, a change in the price of the tradable good at time 0 plays an important role to explain this result.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/09638190601037435
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.

Volume (Year): 15 (2006)
Issue (Month): 4 ()
Pages: 431-439

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Handle: RePEc:taf:jitecd:v:15:y:2006:i:4:p:431-439

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Keywords: Adjustability in production; competition policy; trade balance; short run; long run;

References

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  1. Yano, Makoto, 2001. "Trade Imbalance and Domestic Market Competition Policy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(3), pages 729-50, August.
  2. Matsuyama, Kiminori, 1987. "Current account dynamics in a finite horizon model," Journal of International Economics, Elsevier, vol. 23(3-4), pages 299-313, November.
  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..
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Cited by:
  1. Ma, Yan, 2009. "Trade theorems in a model of vertical production chain," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 70-80, January.

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