Trade can be a powerful engine for economic growth, poverty reduction, and development. However, harnessing the power of trade is often difficult for developing countries, particularly the least developed countries, because of supply-side domestic constraints (lack of trade-related infrastructure and capacity). The Aid for Trade Initiative was launched to address these constraints. This paper s...

Governments often actively participate in storage and trading activities and impose price controls to allay fears of future scarcity and to control ‘collusive practices’ and ‘speculative activities’ of private operators. In this paper, we analyze the impacts of deregulating domestic grain markets in India based on a spatial equilibrium model of interstate trade under arbitrage opportunities. We...

Imports of milk protein concentrates (MPCs) are increasingly entering the United States with minimal trade restrictions. MPC is a general reference to a dried protein product derived from milk using a technology known as “ultra filtration.” Two questions are addressed in this article. First, did the combination of relaxed import restrictions, low world prices for protein, and relatively high do...

This paper presents a two-country dynamic perfect foresight Ricardian model with wealth effects to study the relationship between government spending financed by alternative taxation, the terms of trade and welfare. An increase in domestic government spending financed by a distortionary capital income tax leads the real exchange rate initially to appreciate (a pure demand effect). But along the...

A number of proposals for a tax on the international trade with weapons have been made during the last 20 years. Originally, the major objectives were both to reduce the level of trade in arms and raise money for purposes such as development and disarmament. Later proposals focused on the compensation of victims of the use of specific types of weapons. Various objections have been raised agains...

Outsourcing under incomplete contracts tends to generate too little investment that is specific to the bilateral relationship. In a model where there are otherwise no social motives for protection, we show that protection is helpful when the buyer trades customized inputs with a specialized domestic supplier while also buying standardized inputs from the world market. In that case, a tariff wor...

Endowment based economic models with constant returns to scale and perfect competition have been a primary theoretical basis for analyzing political preferences of domestic actors. However, it is well known that such class of model is inadequate in explaining the large volume of intra-industry trade. How do we understand distributive consequences of trade policy of industrialized countries espe...

Nontariff barriers (NTBs) refer to the wide range of policy interventions other than border tariffs that affect trade of goods, services, and factors of production. Most taxonomies of NTBs include market-specific trade and domestic policies affecting trade in that market. Extended taxonomies include macro-economic policies affecting trade. NTBs have gained importance as tariff levels have been ...

Information asymmetry creates value and incentives for firms from different countries to merge. To demonstrate this point, we develop a model of international trade under oligopolistic competition and asymmetric information, in which domestic firms are informed of the local market demands, but foreign firms are not. By emphasizing two features of a merger between a domestic firm and a foreign f...