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.

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Year of publication:	2003-11-01
Authors:	Visser, Michael S.
Institutions:	Department of Economics, University of Oregon
Subject:	trade policy \| welfare analyis \| teaching

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Extent:	application/pdf
Series:	University of Oregon Economics Department Working Papers.
Type of publication:	Book / Working Paper
Notes:	1 pages long
Classification:	A20 - Economics Education and Teaching of Economics. General ; F10 - Trade. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005464107