Recession, International Trade and the Fallacies of Composition

William Kerr

Estey Centre Journal of International Law and Trade Policy, 2009, vol. 10, issue 01, 11

Abstract: A truly global recession has not been manifest since the Great Depression of the 1930s. As a result, the multilateral institutions put in place at the end of the Second World War to ensure that a major depression never happened again have not been tested. One of the lessons of the Great Depression was that governments had a major role to play in managing the economy. The use of subsidies to affect economic outcomes was one manifestation of this expanded role. In a recession, sector specific subsidies will likely be requested by firms. Subsidies can distort trade, leading to the potential for beggar thy neighbour subsidy wars. Subsidies will be difficult to discipline in a global recession.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ecjilt:48788

DOI: 10.22004/ag.econ.48788

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