We construct a generalized model of finite change. Price based strategies to protect those vanishing sectors will not be equivalent to quantity based strategies.
We construct a generalized model of finite change whereby exogenous shocks such as international trade or technological change, not only contract, but totally shut down production in some sectors. In such cases even in a competitive structure and in absolute contrast to the conventional wisdom, price based strategies to protect those vanishing sectors will not be equivalent to quantity based strategies. We also consider factor trade and a similar asymmetry between price based and quantity based interventionist policies.
Download the paper in PDF format
Hamid Beladi, Avik Chakrabarti and Sugata Marjit
View all GEP discussion papers | View all School of Economics featured discussion papers
Sir Clive Granger BuildingUniversity of NottinghamUniversity Park Nottingham, NG7 2RD
Enquiries: hilary.hughes@nottingham.ac.uk