Traditional Welfare Analysis of a Small CountryÂ’s Trade Policy: A Note
This paper reexamines the standard welfare analysis of export subsidies under perfect competition, pointing out that the prevailing textbook analysis ignores the incentives of foreign producers to sell at the highest price possible, which may be in the domestic market. This substantially alters welfare analysis and perversely leads to intra-industry trade. This is well-understood in the literature, though not included in standard undergraduate textbooks.
|Date of creation:||01 Nov 2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (541) 346-4661
Fax: (541) 346-1243
Web page: http://economics.uoregon.edu/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ore:uoecwp:2004-8. 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: (Bill Harbaugh)
If references are entirely missing, you can add them using this form.