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Monopoly and Trade Policy

  • Carsten Kowalczyk
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    This paper presents a general equilibrium technique for the problem of ranking policies of a nation that trades with a foreign monopoly firm by presenting a generalization of the offer curve. The paper demonstrates the existence of a partial welfare ranking between ad valorem rates and specific rates, and it shows that a minimum import requirement welfare dominates other quantitative policies. The paper proves that a recent policy, the voluntary import expansion, has strongly adverse consequences: when trading with a foreign monopoly firm a nation implementing such a policy will achieve only its autarky level of welfare.

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    File URL: http://www.nber.org/papers/w3475.pdf
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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3475.

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    Date of creation: Oct 1990
    Date of revision:
    Publication status: published as Journal of International Economics, vol. 36, no. 1/2, pp. 177-186, February 1994
    Handle: RePEc:nbr:nberwo:3475
    Note: ITI IFM
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
    Phone: 617-868-3900
    Web page: http://www.nber.org
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    1. James A. Brander & Barbara J. Spencer, 1983. "Trade Warfare: Tariffs and Cartels," NBER Working Papers 1193, National Bureau of Economic Research, Inc.
    2. de Meza, David, 1979. "Commercial Policy Towards Multinational Monopolies-Reservations on Katrak," Oxford Economic Papers, Oxford University Press, vol. 31(2), pages 334-37, July.
    3. Dinopoulos, Elias & Kreinin, Mordechai E, 1990. "An Analysis of Import Expansion Policies," Economic Inquiry, Western Economic Association International, vol. 28(1), pages 99-108, January.
    4. Svedberg, Peter, 1979. "Optimal Tariff Policy on Imports from Multinationals," The Economic Record, The Economic Society of Australia, vol. 55(148), pages 64-67, March.
    5. Takacs, Wendy E., 1978. "The nonequivalence of tariffs, import quotas, and voluntary export restraints," Journal of International Economics, Elsevier, vol. 8(4), pages 565-573, November.
    6. Rodriguez, Carlos Alfredo, 1974. "The non-equivalence of tariffs and quotas under retaliation," Journal of International Economics, Elsevier, vol. 4(3), pages 295-298, August.
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