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Trade Protection and the Location of Production

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  • Thede, Susanna

    (Department of Economics, Lund University)

Abstract

This study examines the economic role of trade protection in a new economic geography model where countries have no inherent differences in endowments, preferences or technologies. This is done in two ways. First, the effects of agricultural and manufacturing protection on the set of equilibria are obtained. Second, the endogenous trade policy positions resulting from a game between national welfare-maximising governments are identified. The model used is a Krugman & Venables (1995) model modified to incorporating agricultural trade costs. Therefore, an additional contribution is the examination of the effect of agricultural trade costs on the equilibrium structure of the model.

Suggested Citation

  • Thede, Susanna, 2002. "Trade Protection and the Location of Production," Working Papers 2002:15, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2002_015
    as

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    File URL: http://project.nek.lu.se/publications/workpap/Papers/WP02_15.pdf
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    References listed on IDEAS

    as
    1. Fredrik Andersson & Rikard Forslid, 2003. "Tax Competition and Economic Geography," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(2), pages 279-303, April.
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    6. Puga, Diego & Venables, Anthony J., 1997. "Preferential trading arrangements and industrial location," Journal of International Economics, Elsevier, vol. 43(3-4), pages 347-368, November.
    7. Puga, Diego & Venables, Anthony J, 1999. "Agglomeration and Economic Development: Import Substitution vs. Trade Liberalisation," Economic Journal, Royal Economic Society, vol. 109(455), pages 292-311, April.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    new economic geography; endogenous trade policies; agricultural trade costs;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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