Trade Policy of Transition Economics

Arbeitspapier

This paper focuses on ignored issues regarding the impact of trade reforms in transition economies. These economies are primarily characterized by a low quality of their products, large depreciations of their currencies, and a high degree of government intervention in economic activity. These elements are embedded in a duopoly model of vertical product differentiation and international trade. First, we show that trade liberalization in transition economies reduces the output of local firms. Second, neither free trade nor zero subsidy is optimal. There exists a rationale for infant-industry protection in that a commitment by the government to use a socially optimal trade and industrial policy can release the domestic firm from low-quality production. Since greater profits are derived from high-quality products, this enables local firms to finance productivity and technology improvements. Third, in terms of social welfare, no equivalence result between the effects of exchange rate changes and the optimal trade policy can be obtained.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Tinbergen Institute Discussion Paper ; No. 00-110/2

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Trade Policy; International Trade Organizations ; Socialist Enterprises and Their Transitions
• Thema: Exchange Rates ; Hedonic Prices ; Leapfrogging ; Optimal Trade Policy ; Product Quality ; Trade Liberalization ; Systemtransformation ; Übergangswirtschaft ; Außenwirtschaftspolitik ; Wechselkurs ; Hedonischer Preisindex ; Produktqualität ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Moraga, Jose Luis ; Viaene, Jean-Marie
• Ereignis: Veröffentlichung
• (wer): Tinbergen Institute
• (wo): Amsterdam and Rotterdam
• (wann): 2000

Weitere Informationen

• Handle: http://hdl.handle.net/10419/85673
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ