e c o n o m i c r e p o r t o f t h e p r e s i d e n t • f e b r u a r y 2 0 1 0 transmitted to the congress february 2010 together with the annual report of the council of economic advisers economic report of the president coverPROOF.indd 1 12/28/09 10:48 AM For sale by...

This paper argues that export subsidies aimed at shifting rents from foreign to domestic producers of a final good may also serve to shift rents to foreign firms supplying an intermediate good, weakening the incentive for the subsidy. By contrast, assuming Cournot competition for both the final...