Adjustability in production and dynamic effects of domestic competition policy

Rui Ota ()

Journal of International Trade & Economic Development, 2006, vol. 15, issue 4, pages 431-439

Abstract: This study explores the effect on trade balance of suppressing competition in the domestic non-tradable sector through the interaction between the short-run adjustment and the long-run adjustment in production process. Constructing a model that can capture a more short-run aspect than Yano (2001), this study demonstrates that the effect depends on the factor intensity ranking between the tradable sector and the non-tradable sector. In this model, a change in the price of the tradable good at time 0 plays an important role to explain this result.

Keywords: Adjustability in production; competition policy; trade balance; short run; long run (search for similar items in EconPapers)
Date: 2006
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