Trade Policy and Loss Aversion

• Tác giả: Caroline Freund
• Ngôn ngữ: eng
• Ký hiệu phân loại: 381.3 Commercial policy
• Thông tin xuất bản: 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 243497
• Chủ đề: 1. Cement; 2. Country and Industry Studies of Trade F140; 3. International Trade Organizations F130; 4. Metals and Metal Products; 5. Trade Policy

Tóm tắt

 We develop a political economy model where loss aversion and reference dependence are important in shaping people's preferences over trade policy. The policy implications of the augmented model differ in three ways: there is a region of compensating protection, where a decline in the world price leads to an offsetting increase in protection, such that a constant domestic price is maintained
  protection following a single negative price shock will be persistent
  and irrespective of the extent of lobbying, there will be a deviation from free trade that favors loss-making industries. The augmented model explains protections of the US steel industry since 1980.