Academic Commons

Articles

Optimal Trade Policy and Compensation under Endogenous Uncertainty: The Phenomenon of Market Disruption

Bhagwati, Jagdish N.; Srinivasan, T. N.

The paper examines the nature of optimal policy intervention required in the exporting country when there is the possibility of a market-disruption-induced trade restriction being invoked by the importing country. The analysis is conducted primarily with a two-period model, with and without adjustment costs, and the results are related to the well-known policy prescriptions of Bhagwati, Ramaswami, Srinivasan, Johnson et al. in the theory of trade and welfare. The last section extends the argument briefly to steady state analysis. The applicability of the analysis to the symmetric, embargo problem is also noted.

Subjects

Files

Also Published In

Title
Journal of International Economics
DOI
https://doi.org/10.1016/0022-1996(76)90033-7

More About This Work

Academic Units
Economics
Published Here
January 31, 2013
Academic Commons provides global access to research and scholarship produced at Columbia University, Barnard College, Teachers College, Union Theological Seminary and Jewish Theological Seminary. Academic Commons is managed by the Columbia University Libraries.