On the static and dynamic costs of trade restrictions

Charles Marrewijk and Koen Berden
Additional contact information
Koen Berden: Tinbergen Institute

Macroeconomics from University Library of Munich, Germany

Abstract: We analyze the costs of trade restrictions for a small developing economy. Capital goods are only introduced on the market if it is profitable to do so. The economy evolves to a balanced growth path in which income, welfare, and the share of introduced capital goods increase if trade restrictions fall. The adjustment path is asymmetric: an increase in trade restrictions will slow-down economic growth, while a decrease may give rise to a rapid catch-up process. The static costs of trade restrictions are smaller than the dynamic costs if, and only if, it changes the share of introduced capital goods.

Keywords: growth; development; static and dynamic costs; trade restrictions; new goods (search for similar items in EconPapers)
JEL-codes: F O (search for similar items in EconPapers)
Date: 2004-12-14
Note: Type of Document - pdf
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/0412/0412011.pdf (application/pdf)

Related works:
Working Paper: On the Static and Dynamic Costs of Trade Restrictions (2004)
Working Paper: On the Static and Dynamic Costs of Trade Restrictions (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0412011

Access Statistics for this paper

More papers in Macroeconomics from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).