Traditional Welfare Analysis of a Small CountryÂ’s Trade Policy: A Note
AbstractThis paper reexamines the standard welfare analysis of export subsidies under perfect competition, pointing out that the prevailing textbook analysis ignores the incentives of foreign producers to sell at the highest price possible, which may be in the domestic market. This substantially alters welfare analysis and perversely leads to intra-industry trade. This is well-understood in the literature, though not included in standard undergraduate textbooks.
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Bibliographic InfoPaper provided by University of Oregon Economics Department in its series University of Oregon Economics Department Working Papers with number 2004-8.
Date of creation: 01 Nov 2003
Date of revision:
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More information through EDIRC
trade policy; welfare analyis; teaching;
Find related papers by JEL classification:
- A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
- F10 - International Economics - - Trade - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-23 (All new papers)
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