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The New Protectionism Revisited

Richard Harris

Canadian Journal of Economics, 1989, vol. 22, issue 4, 751-78

Abstract: This paper reviews the strategic trade literature in oligopolistic industries beginning with the Brander-Spencer (1984) model of duopolistic international rent shifting. Issues of long-run equilibrium, entry conditions, and empirical estimates of the size of oligopolistic rents in tradable goods industries are reviewed. In addition, the results of simulation models of strategic trade policy are summarized. The final sections of the paper deal with issues of the retaliation by other countries against single-country policies and long-term policy equilibrium. It is emphasized that the prisoners' dilemma characterization of these equilibria may be inappropriate and managed trade may be a more plausible outcome in oligopolistic industries than strategic trade policies.

Date: 1989
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