Voluntary import expansions with non-stationary demand
Xiaopeng Yin ()
Canadian Journal of Economics, 2004, vol. 37, issue 4, 1084-1096
Abstract:
In this paper the effect of voluntary imports expansions (VIEs) on welfare in a dynamic game is analysed. It is found that (1) there exists a Markov perfect Nash equilibrium (MPNE) and a unique stable steady state; (2) with habit formation in consumption, the welfare and output for each firm are higher than that without habit formation; and (3) VIEs can increase an importing country's welfare with raised consumption and lowered price. Therefore, VIEs can be voluntary to an importing country.
JEL-codes: F12 F13 (search for similar items in EconPapers)
Date: 2004
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