This paper examines the implications for strategic trade policy of different assumptions about precommitment. In a … optimal subsidy is increasing in the rate of learning with precommitment, but decreasing in it if the government cannot … precommit. The infant-industry argument is thus reversed in the absence of precommitment, which has important implications for …

. International policy coordination without precommitment can be counterproductive even though there are no tax distortions and the …. The typical ranking in order of decreasing welfare is first-best optimum, cooperation with precommitment, competition with … precommitment, competition without precommitment and coordination without precommitment. …

It is shown that, when there is a genuine long-run trade-off between inflation and output, coordination under pre-commitment … attempts to be a "free rider". Coordination leads to a lower world real interest rate and higher welfare. Pre-commitment is … formulation lead to excessive monetary growth rates and higher levels of activity than under coordination or competition with pre-commitment …