GINS 2010 Lecture Notes - Lecture 6: Oligopoly, Byrsonima Crassifolia, Infant Industry Argument
16 Dec 2016
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Hecksher-ohlin: production involves a multiple inputs and countries have different combinations of l,c,and land/ natural resources (nr) Stopler-samuelson: international trade induces adjustments per sector and input (factors of production), altering wages, pro ts and prices. Speci c factors: adjustments can only be done partially, as l, l and land/nr is often speci c to a certain industry. Do nothing, some industries will ounder or shrink buttoners will grow or appear. Facilitate the adjustment with stern bankruptcy laws and lax labour codes. Strengthen national safety nets for unemployment, healthcare, education. Protect losing industries with tariffs or quotas on imports. Support local exporting rms with credits, tax breaks, market intelligence. Last 2 options imply uses of international trade policy, meaning the set of rules and regulations affecting foreign trade speci cally. Tariffs are taxes applied to foreign-made goods or services. They vary across industries and also over time.
