Working Papers, Department of Economics, Lund University
Trade Protection and the Location of Production
Abstract: This study examines the economic role of trade protection
in a new economic geography model where countries have no inherent
differences in endowments, preferences or technologies. This is done in two
ways. First, the effects of agricultural and manufacturing protection on
the set of equilibria are obtained. Second, the endogenous trade policy
positions resulting from a game between national welfare-maximising
governments are identified. The model used is a Krugman & Venables (1995)
model modified to incorporating agricultural trade costs. Therefore, an
additional contribution is the examination of the effect of agricultural
trade costs on the equilibrium structure of the model.
Keywords: new economic geography; endogenous trade policies; agricultural trade costs; (follow links to similar papers)
JEL-Codes: F12; F13; (follow links to similar papers)
49 pages, May 27, 2002
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