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Foreign Economic Aid and Trade Liberalization Under Imperfect Competition

Hiroshi Kurata () and Masayuki Okawa ()
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Hiroshi Kurata: Tohoku Gakuin University
Masayuki Okawa: Ritsumeikan University

A chapter in International Trade and Economic Dynamics, 2009, pp 139-149 from Springer

Abstract: This chapter examines the possibility of a mutually beneficial policy combination of economic aid by a donor country and tariff reducing trade liberalization in the recipient country under imperfect competition. We set up a simple two country Ricardian trading model in which the donor's export good is supplied by a monopoly firm and the recipient country imposes tariff on imports from the donor country. We derive the condition that mutually beneficial policy coordination can be agreed by the two countries.

Keywords: Trade Liberalization; Consumer Surplus; Recipient Country; Imperfect Competition; Tariff Rate (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-540-78676-4_13

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DOI: 10.1007/978-3-540-78676-4_13

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