The Failure of Strategic Industrial Policies Due to the Manipulation by Firms

The strategic effects of subsidies on output and subsidies on investment differ substantially in dynamic models where a government's commitment ability is limited. Output subsidies remain effective even as the period of commitment vanishes, but investment subsidies may become completely ineffective. This difference has been obscured because most existing models of strategic trade policy are static.


Issue Date:
1993
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/6052
Total Pages:
31
JEL Codes:
410; 026
Series Statement:
CUDARE Working Paper
584, Rev




 Record created 2017-04-01, last modified 2017-04-04

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