WHICH COUNTRY LOSES THE LEAST IN A TRADE WAR?

James D. Gaisford and William Kerr

Australian Journal of Agricultural Economics, 1992, vol. 36, issue 3, 26

Abstract: Trade actions, which can generally be claimed as trade wars, appear to be on the rise. This is particularly true in the case of agricultural commodities. It is a common perception that large countries will be the victors in such contests and this clearly affects the trade strategies of small countries, including Australia. The relationship between free-trade and trade-war pay-offs in the context of a prisoner's dilemma is explored in this paper. It is shown why neither a favourable terms of trade movement, a flatter import demand curve nor a larger population is, on its own, a sufficient condition for a relative victory in a trade war. The implications for small country trade strategies are then discussed.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Date: 1992
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:ajaeau:22389

DOI: 10.22004/ag.econ.22389

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