NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Trade Policy and Import Competition under Fluctuating Prices

Paul Strebel, Shabtai Donnenfeld

NBER Working Paper No. 628*
Issued in February 1981
NBER Program(s):   ITI    IFM

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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