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Trade Wars and Trade Talks

Gene Grossman and Elhanan Helpman

Journal of Political Economy, 1995, vol. 103, issue 4, 675-708

Abstract: When governments meet in the international arena, their actions reflect the political situations at home. Previous studies of trade relations have focused on governments that are immune from political pressures and that act as benevolent servants of the public interest. Here the authors introduce domestic politics into the analysis of international economic relations. They study the interactions between national leaders who are concerned with both providing a high standard of living to the general electorate and collecting campaign contributions from special-interest groups. The authors' analysis sheds light on the determinants of the structure of protection in noncooperative and cooperative policy equilibria. Copyright 1995 by University of Chicago Press.

Date: 1995
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