Download PDF by S. Suranovic: A Moderate Compromise: Economic Policy Choice in an Era of

By S. Suranovic

ISBN-10: 0230114601

ISBN-13: 9780230114609

ISBN-10: 1349289671

ISBN-13: 9781349289677

Looking in any respect facets of the globalization debate, this e-book analyzes how foreign financial coverage is made and the way it has turn into so arguable. the writer deals an answer to the talk among loose trade/unregulated markets and the frenzy for higher govt involvement that's in line with either financial potency and social justice

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Additional info for A Moderate Compromise: Economic Policy Choice in an Era of Globalization

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This result implies that some individuals will gain in the short run and lose in the long run. Other will lose in the short run and gain in the long run. General Implications Economists have developed even more complex models of international trade including some with multiple goods, multiple factors, and multiple countries. However, regardless of the complexity of the model and regardless of which features are included or excluded, there is one Economic Theory and Policy Choice 19 basic result that almost all8 models of international trade display: trade liberalization causes income redistribution.

Thus, a protectionist trade policy, if set at the appropriate level, will raise national welfare if the positive health effects outweigh the standard economic efficiency losses of protection. The reverse implication is true too; free trade, or trade liberalization, may lower national welfare in the presence of this externality. Free trade may not be the best policy in the presence of a negative production and consumption externality. Cultural Externality Effects Concerns about free trade and global markets have more recently involved the issue of culture.

What students learn in an international trade class is that a relatively small tariff implemented by a large importing country raises national welfare; in other words economic efficiency improves with protection. The same positive effect on welfare is possible on the export side when a large country implements an export tax. In contrast, if any tariff or export tax is implemented by a small country, national welfare falls. To see that it is not just a theoretical curiosity, one need only look to the welfare benefits achieved by OPEC countries during the oil embargo era of the 1970s.

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A Moderate Compromise: Economic Policy Choice in an Era of Globalization by S. Suranovic

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