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Strategic Agricultural Trade Policy Interdependence and the Exchange Rate: A Game Theoretic Analysis


  • Kennedy, P Lynn
  • von Witzke, Harald
  • Roe, Terry L


Strategic agricultural trade policy interdependence is modeled using a game theoretic framework. The model distinguishes between the European Community, the United States, and a politically passive rest-of-the-world. Particular emphasis is placed on the effect of the exchange rate on the equilibrium outcome of this game. Without compensatory payments to those with the highest political influence, the results suggest that only modest reform is possible. With compensation, liberalization occurs but free trade is not obtained. Simulations also indicate that the United States gains incentive to reduce protection given a depreciation of the dollar, while incentive to liberalize trade policies decreases as the dollar appreciates. Copyright 1996 by Kluwer Academic Publishers

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  • Kennedy, P Lynn & von Witzke, Harald & Roe, Terry L, 1996. "Strategic Agricultural Trade Policy Interdependence and the Exchange Rate: A Game Theoretic Analysis," Public Choice, Springer, vol. 88(1-2), pages 43-56, July.
  • Handle: RePEc:kap:pubcho:v:88:y:1996:i:1-2:p:43-56

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    Cited by:

    1. Cemal Atici, 2008. "Political Economy of Agricultural Policies and Environmental Weights," ICER Working Papers 25-2008, ICER - International Centre for Economic Research.
    2. Atici, Cemal & Kennedy, P. Lynn, 2000. "A Game Theoretic Analysis of Turkey's Integration into the European Union," 2000 Conference, August 13-18, 2000, Berlin, Germany 197225, International Association of Agricultural Economists.
    3. Atici, Cemal & Kennedy, P. Lynn, 2005. "Tradeoffs between income distribution and welfare: The case of Turkey's integration into the European Union," Journal of Policy Modeling, Elsevier, vol. 27(5), pages 553-563, July.

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