Appendix to Chapter 10

Giancarlo Gandolfo

Chapter Chapter 24 in International Trade Theory and Policy, 2014, pp 527-542 from Springer

Abstract: Abstract If we assume that country 1 imports commodity A and exports commodity B whilst the opposite holds for country 2, international equilibrium is determined in accordance with Eq. ( 19.27 ), which we rewrite here 24.1 $$\displaystyle{ E_{2B}\left (p\right ) + E_{1B}\left (p\right ) = 0, }$$ or 24.2 $$\displaystyle{ E_{2B}\left (p\right ) = -E_{1B}\left (p\right ), }$$ that is, the excess demand for commodity B by country 2 (country 2’s demand for imports) is equal in absolute value to the excess supply of this commodity by country 1 (country 1’s supply of exports).

Keywords: Domestic Firm; Intermediate Good; Reaction Function; Tariff Rate; Stackelberg Equilibrium (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-642-37314-5_24

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DOI: 10.1007/978-3-642-37314-5_24

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