Bilateral trade wars
The paper constructs a three-country, two-good general equilibrium model to analyze the welfare effects of bilateral trade wars. The presence of a third country (or a number of countries) pursuing free trade policies alters several results based on a two-country framework: Regardless of whether tari...
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Veröffentlicht in: | The International trade journal 1996-03, Vol.10 (1), p.3-20 |
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Hauptverfasser: | , , |
Format: | Artikel |
Sprache: | eng |
Online-Zugang: | Volltext |
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Zusammenfassung: | The paper constructs a three-country, two-good general equilibrium model to analyze the welfare effects of bilateral trade wars. The presence of a third country (or a number of countries) pursuing free trade policies alters several results based on a two-country framework: Regardless of whether tariffs or quotas are used, bilateral trade wars need not eliminate trade between the two retaliating countries; even a "small" retaliating country can win a bilateral trade war; and quotas can be welfare-superior to tariffs under bilateral retaliation. |
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ISSN: | 0885-3908 1521-0545 |
DOI: | 10.1080/08853909608523845 |