IMPERFECT COMPETITION, INTRA-INDUSTRY TRADE AND TRADE POLICY

抄録

The following duopoly model of trade will be considered. There are two goods (0 and 1). Good 0 is produced by perfectly competitive firms and good 1 is produced with nonlinear cost functions by a domestic firm and a foreign firm, each following the Cournot behavior. The home country can consider an import tariff and/or an export subsidy as policy instru-ments. In this paper we shall consider the full optimum and some constrained optima where only one instrument is available and examine effects on national and world welfare of a change in the domestic import tariff or export subsidy.