Incentive Compatible Trade Policies
A two-country trade model with production uncertainty is considered. If complete contingent markets do not exist, it is desirable for governments to adopt some trade policies to share the production risk. A full-information policy involves incomes transfers across co untries, which can be achieved by equal import tariffs and export sub sidies. With incomplete information, the author considers incentive c ompatible trade policies, which are designed to be truth revealing wh ile partially sharing the production risk. In this case, the tariff i n one country may differ from the export subsidy abroad. Copyright 1987 by The editors of the Scandinavian Journal of Economics.
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Volume (Year): 89 (1987)
Issue (Month): 3 ()
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jonathan Eaton & Gene M. Grossman, 1985.
"Tariffs as Insurance: Optimal Commercial Policy When Domestic Markets Are Incomplete,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 18(2), pages 258-272, May.
- Jonathan Eaton & Gene M. Grossman, 1981. "Tariffs as Insurance: Optimal Commercial Policy When Domestic Markets Are Incomplete," NBER Working Papers 0797, National Bureau of Economic Research, Inc.
- Newbery, David M G & Stiglitz, Joseph E, 1982. "The Choice of Techniques and the Optimality of Market Equilibrium with Rational Expectations," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 223-246, April.
- Rosen, Sherwin, 1985. "Implicit Contracts: A Survey," Journal of Economic Literature, American Economic Association, vol. 23(3), pages 1144-1175, September.
- Sherwin Rosen, 1985. "Implicit Contracts: A Survey," NBER Working Papers 1635, National Bureau of Economic Research, Inc.
- Elhanan Helpman & Assaf Razin, 1978. "Welfare Aspects of International Trade in Goods and Securities," The Quarterly Journal of Economics, Oxford University Press, vol. 92(3), pages 489-508. Full references (including those not matched with items on IDEAS)