Contingent Protection, and the International Distribution of Excess Capacity

Richard G. Harris

No 275220, Queen's Institute for Economic Research Discussion Papers from Queen's University - Department of Economics

Abstract: The implications of demand and cost fluctuations, both anticipated and uncertain, for the international distribution of industrial excess capacity are explored. Three partial equilibrium models of excess capacity and contingent protection policies which are correlated with distress on the part of the domestic firms are constructed. It is argued that conventional tariff-equivalent measures of protection are substantial understatements of the long run effects of contingent protection when sunk costs in the form of capacity are large. It is also argued that contingent protection exacerbates the degree of excess capacity on average in the industry, and further that anticipation of the policy 'triggers' for implementation of contingent protection fosters collusive behaviour in the industry.

Keywords: Financial Economics; Public Economics (search for similar items in EconPapers)
Pages: 31
Date: 1989-11
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/275220/files/QUEENS-IER-PAPER-763.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:queddp:275220

DOI: 10.22004/ag.econ.275220

Access Statistics for this paper

More papers in Queen's Institute for Economic Research Discussion Papers from Queen's University - Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().