NBER Working Papers by shabtai donnenfeld

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February 1981

Trade Policy and Import Competition under Fluctuating Prices
with Paul Strebel: w0628

When subsidies and tariffs are applied to imports with fluctuating prices, it is shown that the output response of domestic producers depends on market structure and their attitude toward risk. The domestic industry response is contrasted under two types of market structure, a monopoly and a competitive industry. Some unanticipated results suggest caution in the implementation of trade policy.

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