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Imperfect Competition, Trade Policy And Processed Agricultural Products: Some Initial Results

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  • McCorriston, Steve
  • Sheldon, Ian M.

Abstract

This paper applies some recent developments in international trade theory to processed agricultural product markets. Theoretical results are derived showing that when such markets are characterized by imperfect competition, there may be a case for government intervention in the form of subsidies and tariffs. In order to provide some empirical background, a simulation model is used to assess the level of an optimal tariff on U.S. cheese imports. The implications of this analysis for the liberalization of agricultural trade are also considered.

Suggested Citation

  • McCorriston, Steve & Sheldon, Ian M., 1990. "Imperfect Competition, Trade Policy And Processed Agricultural Products: Some Initial Results," Journal of Food Distribution Research, Food Distribution Research Society, vol. 21(2), pages 1-8, June.
    • Handle: RePEc:ags:jlofdr:26549
    DOI: 10.22004/ag.econ.26549
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    References listed on IDEAS

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    1. Marie Thursby, 1988. "Strategic Models, Market Structure, and State Trading: An Application to Agriculture," NBER Chapters, in: Trade Policy Issues and Empirical Analysis, pages 79-108, National Bureau of Economic Research, Inc.
    2. Mccorriston, Steve & Sheldon, Ian, 1989. "Imperfect Competition, Trade Policy and Processed Agricultural Products," Occasional Papers 232831, Regional Research Project NC-194: Organization and Performance of World Food Systems.
    3. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
    4. Robert E. Baldwin, 1988. "Trade Policy Issues and Empirical Analysis," NBER Books, National Bureau of Economic Research, Inc, number bald88-2, March.
    5. Jonathan Eaton & Gene M. Grossman, 1986. "Optimal Trade and Industrial Policy Under Oligopoly," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(2), pages 383-406.
    6. Dale M. Heien & Cathy Roheim Wessells, 1988. "The Demand for Dairy Products: Structure, Prediction, and Decomposition," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(2), pages 219-228.
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