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Optimal trade policy for opening markets

By Dominik Egli and Frank Westermann


Developing and Eastern European countries recently started opening their economies. We analyze how the opening to international trade can be accompanied by strategic trade policy if the resulting market structure is oligopolistic. We find that for reasonable parameter values, a tariff is the optimal policy tool. Furthermore, tariffs and quotas are not welfare equivalent in our model

Topics: Aussenhandelspolitik, Marktstruktur, Subvention, Zoll, 337: Weltwirtschaft und Handel
Publisher: CES - IFO Economic Studies
Year: 1997
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