Abstract
Will the incentives to pursue strategically motivated trade or industrial policies rise or fall if countries form trading blocs? Economists have emphasized that one of the principal channels for welfare gains of Europe 1992 is a reduction of intra-European real trade costs. This paper identifies the spillover effects that such trade cost reductions might have on industrial policies aimed at strategic distortions in oligopolistic industries. We use a conjectural variations oligopoly model covering three countries, whose governments choose a general production subsidy/tax to target international strategic distortions. Integration is modeled as a reduction of trade costs for two of these countries, and we analyse how this affects outcome in an non-cooperative policy game.
| Original language | English |
|---|---|
| Title of host publication | Quiet Pioneering: Robert M. Stern and His International Economic Legacy |
| Editors | K.E. Maskus, P.M. Hooper, E.E. Leamer and J.D. Richardson |
| Place of Publication | Ann Arbor |
| Publisher | The University of Michigan Press |
| Pages | 193-227 |
| Publication status | Published - 1997 |
Fields of science
- 405002 Agricultural economics
- 502 Economics
- 502001 Labour market policy
- 502002 Labour economics
- 502003 Foreign trade
- 502009 Corporate finance
- 502010 Public finance
- 502012 Industrial management
- 502013 Industrial economics
- 502018 Macroeconomics
- 502020 Market research
- 502021 Microeconomics
- 502025 Econometrics
- 502027 Political economy
- 502039 Structural policy
- 502042 Environmental economics
- 502046 Economic policy
- 502047 Economic theory
- 504014 Gender studies
- 506004 European integration
- 507016 Regional economy
- 303010 Health economics
