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Title: |
Strategic Trade Policies, Differentiated
Duopoly and Intra-industry Trade |
| Author: |
Fung, K. C. |
| Author
Affiliation: |
Mount Holyoke
Col |
| Source: |
International Economic Journal, Autumn 1988, v. 2, no. 3, pp. 19-34 |
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Publication Date: |
Autumn 1988 |
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Abstract: |
This paper examines the economic effects
of various trade policies in a Brander-Krugman style model of
intra-industry trade. The policies considered include tariffs,
production subsidies, consumption taxes, countervailing duties, and
anti-dumping duties. In the analysis, the role of product
differentiation and teh relative competitive advantages of the firms are
highlighted. Various trade policy formulas are also computed.
Furthermore, it is shown that in such a model, free trade is not
necessarily better than no trade. More product differentiation and
slower transport costs will make free trade more desirable. |
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