2007-09-01
On the static and dynamic costs of trade restrictions for small developing countries
Publication
Publication
Journal of Development Economics , Volume 84 - Issue 1 p. 46- 60
We analyze the costs of trade restrictions for a small developing economy (LDC). Intermediate goods invented elsewhere are only introduced on the LDC market if it is profitable to do so. The LDC economy evolves to a balanced growth path in which income, welfare, and the share of available goods increase if trade restrictions fall. The adjustment path is asymmetric: an increase in trade restrictions leads to a slow-down of economic growth, while a decrease may lead to a rapid catch-up process. The dynamic costs of trade restrictions are in general substantially larger than the static costs.
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| doi.org/10.1016/j.jdeveco.2006.09.002, hdl.handle.net/1765/12986 | |
| Journal of Development Economics | |
| Organisation | Erasmus School of Economics |
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van Marrewijk, C., & Berden, K. (2007). On the static and dynamic costs of trade restrictions for small developing countries. Journal of Development Economics, 84(1), 46–60. doi:10.1016/j.jdeveco.2006.09.002 |
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