Two-Part Trade Policy under Imperfect Competition

In this paper we consider the potential gain of a government pursuing a two-part trade policy: an import license for entry, along with a per-unit tariff on imports. The model is a two-stage game of complete but imperfect information. In the first stage, the domestic government sets trade policy, while in the second stage the home and foreign producers behave as Cournot competitors. The paper demonstrates that the optimal trade policy depends upon the number of firms, the degree of heterogeneity in cost functions, and the degree of convexity in cost functions.     

Dynamic Gains from International Trade with Imperfect Competition and Market Power

This paper revisits the gains from trade under imperfect competition by explicitly modeling strategic competition and entry. The papers highlights a welfare cost of imperfect competition, due to inefficiently high entry. Through increasing competition, international trade lowers price–cost markups and reduces excessive entry. This adds on a competitive channel for gains from trade to the well-known product diversity channel from previous literature. Both channels will increase the return to investment and raise the steady-state capital stock. An alternative case is possible, however, where there is inefficiently low entry. In that case, trade tends to be anticompetitive, raising price–cost markups and encouraging increased entry.     

Imperfect Competition and the Gains from Trade in a Macro Duopoly Model

A general-equilibrium duopoly trade model is developed. In the micro model, constant-elasticity market demand curves produce backward-bending reaction functions. This is combined with a macro analysis in which the real wage is determined competitively, while nominal variables depend on the money supply. Trade can lead to large increases in aggregate output, employment, and real wages. The gains from trade are the result of increases in market size, and greater competition in each market. The benefits of trade are largest when marginal-cost curves slope downward and the labor supply curve is elastic.     

Liberalizing Services Trade In APEC: A General Equilibrium Analysis with Imperfect Competition

The paper studies services-sector trade liberalization in the Asia–Pacific Economic Co-operation (APEC) Forum using a global, multicountry, multisector applied general equilibrium model with an imperfectly competitive service sector. Reducing the service sector's nontariff barriers is modeled by eliminating the possibility for oligopolistic firms to price-discriminate between client countries within APEC and lowering the fixed costs of the firms doing service exporting business. The results suggest that services trade liberalization reinforces existing sectoral trade balances. Increase in demand for intermediate services tends to reinforce rather than counteract the role of primary factors in determining sectoral comparative advantage. The western APEC members received the greatest welfare gains from services trade liberalization, while the developing economies gained more if only tariffs were eliminated.     

论APEC服务贸易的自由化进程——不完全竞争条件下的一般均衡分析

原文出处:本文译自作者于1997年9月向美国国际贸易委员会经济学办公室提交的工作论文:Liberalizing APEC Trade in Services:A General Equilibrium Analysis with Imperfect Competition一、引言(一)服务贸易服务业在每一个国家都是一个重要的行业,在大多数国家它都占到GDP的50%到80%。集体而言,由于服务业是几乎所有国家中最大的行业,所以,把服务业说成是其他行业生产中重要的中间投入也就不奇怪了。服务业还在国际贸易中起着日益重要的作用。虽然,在过去,服务曾经被认为是不可交易的,但现在,国际服务贸易已成为世界贸易中发展最快…     

An Investigation into the Major Causes 01 Australia's Recent Inflation and Some Policy Implications*

This paper investigates the major causes of Australia's recent inflation with special emphasis on the 1970s and early 1980s A general model of inflation is formulated based upon a vector auto-regression The main empirical finding is that increases in wages and import prices and more recently in money have been significant causal factors of Australia's inflationary experience. Government current expenditure is found to contribute passively to cost-push inflation     

A Theory of Trade Secrets in Firms*

This article provides a simple theoretical model of trade secrets in hierarchical firms. A crucial assumption is that each manager has access to trade secrets pertaining to his own hierarchical level as well as to all lower levels. The article explores some implications of this assumption for optimal degree of trade secrets accumulation and protection as well as for the wage structure in firms. In addition, the model implies that managers may have an incentive to overpay their subordinates and protect their firms’ trade secrets too much.     

Labour Hoarding, Price Rigidity and the Theory of Imperfect Competition under Uncertain Demand

It is shown that a monopolistic firm under uncertainty may be inclined to keep some of its output unsold when demand is low. This gives rise to changes in conventional results. Under uncertainty, a risk-neutral monopolistic firm produces more than in a deterministic environment and it refuses to sell its total output when demand is low, because the marginal revenue could become negative or lower than the cost of selling the product. Moreover, in this framework, prices are shown to be more rigid downwards than upwards. The model also provides a new explanation for labour hoarding.
JEL classification : D 24; D 42     

Linking Absolute and Comparative Advantage to Intra-Industry Trade Theory*

Two countries, which differ with respect to domestic demand for two groups of differentiated products, are considered in a setting of monopolistic competition where international trade is subject to transaction costs. It is shown that relative differences in demand determine the trade pattern. Each country is a net exporter of that group for which domestic demand is relatively larger-where the country has a comparative home-market advantage. Absolute differences in demand determine relative wages. Thus, the paper argues that the notions of absolute and comparative advantage as found in traditional trade theory also have meaning in new trade theory.     

Modelling Policy Issues in a World of Imperfect Competition

General equilibrium theory constitutes a sound basis for the discussion of policy issues if firms do not have market power. However, if firms influence prices strategically, the concept of profits loses its meaning due to the price normalization problem. Hence, it is unclear how to model the behavior of oligopolistic firms. In order to provide a conceptual foundation for the analysis of policy issues in the case of imperfect competition, we discuss ways to formulate the objective of a strategic firm. In particular, we investigate the concept of real wealth maximization that is based on profits as well as on shareholders' aggregate demand.     

不完全竞争条件下代建单位名录的声誉效应研究

本文将声誉效应引入代建单位名录的管理中,分析在代建单位声誉的构成及声誉测量条件下的代建单位名录动态管理的制度设计.研究结果以期能指导各地区代建单位名录的建立和管理,最终实现对代建人的有效激励.     

Ambiguous Social Welfare Effects of Price Regulation Under Imperfect Competition

Conventional wisdom is that a binding price ceiling increases output and so increases social welfare if imposed on an imperfectly competitive market. However, this paper shows that a price ceiling can be harmful to social welfare even though it increases industry output and consumer surplus. This model can be applied to the pharmaceutical industry under price control in many countries, e.g., U.K., Canada, Germany and Japan.     

Trade Policy Transparency and Investor Confidence: Some Implications for an Effective Trade Policy Review Mechanism

This paper is concerned with the value of the WTO's Trade Policy Review Mechanism, particularly its transparency role and its potential role in policy stability, for investor confidence in developing countries. The implications of reduced risk and uncertainty regarding trade policy for investor confidence, and ultimately for the capital stock and the long-run structure of production, are examined in an analytical model. Certainty equivalence is employed to assess the general equilibrium effects of risk and uncertainty. Their reduction can boost risk-adjusted returns, leading to an increase in long-run levels of capital.