Rational expectations are often used as a strong argument against policy activism, as they may undermine or neutralize the policymaker’s actions. Although this sometimes happens, rational expectations do not always imply policy invariance or ineffectiveness. In fact, in certain circumstances...

This paper analyses how European anti-dumping policy under imperfect competition affects firm behaviour and domestic welfare. Our theoretical model is the first to complement the European empirical literature on anti-dumping policy (see Messerlin (1989), Hindley (1988), Tharakan and Waelbroeck...