Economic Effects of 'Leveling the Playing Field' in International Trade
This paper uses simple economic theory to examine the effects of various policies that are intended to level the playing field in international trade. That is, when foreign producers are given advantages over domestic producers by government subsidies or other interventions that lower their costs, domestic firms may argue that their own governments should either provide comparable assistance or should protect them from competing with the foreign firms on grounds of fairness. Economic analysis easily shows that granting these requests is usually harmful for the domestic economy as a whole, but that may not prevent such policies from being implemented. Therefore this paper examines what the further effects of such policies may be. The main conclusion that emerges is that policies to level the playing field most often overcompensate those who request them, making them better off than if the playing field had not be tilted against them in the first place.
|Date of creation:||Jul 2009|
|Date of revision:|
|Contact details of provider:|| Postal: ANN ARBOR MICHIGAN 48109|
Phone: (734) 764-3490
Fax: (734) 763-9181
Web page: http://fordschool.umich.edu/rsie/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:mie:wpaper:589. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (FSPP Webmaster)
If references are entirely missing, you can add them using this form.