Economics Dictionary of ArgumentsHome
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| Trade policies: Trade policies refer to government strategies and regulations that influence the flow of goods and services across borders. These policies include tariffs, quotas, subsidies, and trade agreements designed to protect domestic industries, promote exports, regulate imports, and foster economic relationships between nations. _____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Political Economy on Trade Policies - Dictionary of Arguments
Feenstra I 9-1 Trade policies/Political Economy/Feenstra: The idea that non-competitive markets give rise to opportunities for governments to gain from trade policies has been an important line of research. It has ultimately been concluded, however, that such opportunities for “strategic” use of trade policy are very limited. This raises the obvious question of why trade policies are used so often? One answer is that such policies are politically motivated: tariffs are granted in response to demands by special interest groups, such as industries and unions. The research issue is to understand how such demands are mediated through the political process. Models: [there is the] median voter model of Mayer (1984)(1) and the “protection for sale” model of Grossman and Helpman (1994)(2). >Median voter model/Feenstra. The “protection for sale” model has been extended in a number of directions. Mitra (1999)(3) has shown how to introduce endogenous lobbies into that framework, as we shall discuss. Grossman and Helpman (1995a)(4) further use this framework to analyze a tariff war between two countries, and the potential benefits from international agreements. Along the same lines, Bagwell and Staiger (1997(5), 2002(6)) examine the economic rationale for the trade rules embodied in the General Agreement on Trade and Tariffs (GATT) and the World Trade Organization (WTO). These rules include GATT’s principle of “reciprocity,” whereby each country agrees to reduce its trade barriers in return for a reciprocal reduction by another. >Protection for sale. Bagwell and Staiger’s framework is general enough to include both the median voter model and the “protection for sale” model (…). 1. Mayer, Wolfgang, 1984, “Endogenous Tariff Formation,” American Economic Review, December, 74(5), 970-985. 2. Grossman, Gene M. and Elhanan Helpman, 1994, “Protection for Sale,” American Economic Review, 84, 833-850. 3. Mitra, Devashish, 1999, “Endogenous Lobby Formation and Endogenous Protection: A long-Run Model of Trade Policy Determination,” American Economic Review, 89(5), December, 1116-1134. 4. Grossman, Gene M. and Elhanan Helpman, 1995a, “Trade Wars and Trade Talks,” Journal of Political Economy, 103(4), August, 675-708. 5. Bagwell, Kyle and Robert W. Staiger, 1997, “An Economic Theory of GATT”, American Economic Review, 89(1), March, 215-248. 6. Bagwell, Kyle and Robert W. Staiger, 2002, The Economics of the World Trading System. Cambridge: MIT Press._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Political Economy Feenstra I Robert C. Feenstra Advanced International Trade University of California, Davis and National Bureau of Economic Research 2002 |
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