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Import-Subsidy Coordination and the Gains from International Diffusion Of Differentiated Middle Products

Hwan Lin

International Economic Journal, 1998, vol. 12, issue 2, 55-76

Abstract: This paper shows that under reasonable parameter values it is independently rational for an importing country to impose a tariff on differentiated middle products, which are invented by monopolists worldwide in the high-technology sector. But to realize mutual gains, countries must use import subsidies in a cooperative manner. To dictate policy coordination, the paper computes the bilaterally coordinated subsidy bands under different sets of parameter values, reflecting monopoly power, spending share, and supply elasticities. [F12, F13]

Date: 1998
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DOI: 10.1080/10168739800000013

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