Protectionism and Managed Trade

Protectionism and Managed Trade - PROTECTIONISM AND MANAGED...

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PROTECTIONISM AND MANAGED TRADE
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Are there welfare enhancing arguments for restricting trade? There are three broad classes of arguments that get made Arguments based on trade theory assumption limitations Arguments that focus on income distribution effects of trade Arguments such as national security, culture etc
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ARGUMENTS BASED ON TRADE THEORY ASSUMPTION LIMITATIONS The Infant-Industry Argument asks for temporary protection of a new industry in a developing economy until that industry is able to compete in international markets against more experienced competitors. However, it is difficult to spot good infant-industry candidates there is no reason why private investors cannot invest in such industries once identified protection once given, is very difficult to remove it is better to subsidize proDUction (SPECIFICITY RULE) rather than to put up barriers against imports
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ARGUMENTS BASED ON TRADE THEORY ASSUMPTION LIMITATIONS The argument from Learning Curve Effects
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Protectionism and Managed Trade - PROTECTIONISM AND MANAGED...

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