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Some Fresh Perspectives on Price-Support Policies: Technical Paper 2000-4

Preston Miller

No 13336, Working Papers from Congressional Budget Office

Abstract: Trade protection remains a prominent feature of the current world economy and likely has significant effects on industries and macroeconomies. In this paper a particular type of policy, price supports, is analyzed in a two-country, dynamic, general equilibrium model. This model brings new perspectives to the analysis in that it is monetary and has labor mobility within countries between the traded-goods and non-traded-goods sectors. It is found that: (1) The introduction of price supports in an economy benefits only the agents currently working in the traded-goods sector. (

Date: 2000-07-01
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