Domestic Welfare Effects of Foreign Strategic Trade Policies

Philippe Kohler () and Michael Moore
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Philippe Kohler: Institut d’Etudes Politiques de Paris, Postal: Institut d’Etudes Politigues de Paris 2, Sguare de, Luynes 75007- Paris, France

Journal of Economic Integration, 2003, vol. 18, 573-586

Abstract: Within a duopoly strategic trade policy model, we analyze the effect of foreign strategic trade policies on domestic welfare when the domestic government pursues a laissez-faire import policy. With Cournot competition and domestic production and consumption, an increase in the foreign strategic export subsidy increases domestic welfare when the domestic price exceeds the foreign firm marginal cost. With Bertrand competition, an increase in the foreign strategic export tax has ambiguous effects on domestic welfare and depends on the degree of product differentiation and domestic cross-price elasticity of demand between domestic and foreign goods.

Keywords: Dumping; Laissez-faire policy; Strategic trade policy (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0249

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