Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
963192 | Journal of International Economics | 2007 | 18 Pages |
Abstract
An enduring puzzle in international economics is why trade interventions are biased in favor of import-competing rather than export sectors and therefore restrict trade. In this paper, we show that if the government's objective reflects a concern for inequality then trade policy generally exhibits an anti-trade bias. Importantly, under neutral assumptions, the mechanism that we analyze generates the anti-trade bias independently of whether factors are specific or mobile across sectors. The mechanism also generates an anti-trade bias between large countries even after they sign reciprocal trade agreements that eliminate any terms-of-trade motivation for the use of trade protection.
Keywords
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Social Sciences and Humanities
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Economics and Econometrics
Authors
Nuno Limão, Arvind Panagariya,