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Efficient choice among domestic and trade policies in the Grossman-Helpman Interest-Group Model AgEcon
Schleich, Joachim; Orden, David.
This paper generalizes the recent political economy model of Helpman and Grossman in which contributions by producer lobbies and government decisions about trade policies are modeled as a common agency game. We allow the government to choose among domestic as well as trade interventions. When production and trade policies are available, the equilibrium production policies serve the lobbies while the trade policies reflect the country's international market power. When consumption and trade policies are available, tariffs and export subsidies are applied in a small-country model to serve the special interests, and the domestic policies are selected to restore consumer prices to world levels. In a large-country model, the optimal consumption and trade...
Tipo: Working or Discussion Paper Palavras-chave: Political economy; Trade policies; Domestic subsidies and taxes; Efficient policies; Common agency; International Relations/Trade; F11; F13.
Ano: 1996 URL: http://purl.umn.edu/7458
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