Trade Wars and Trade Talks

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Trade Wars and Trade Talks

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Title: Trade Wars and Trade Talks
Author: Grossman, Gene M.; Helpman, Elhanan

Note: Order does not necessarily reflect citation order of authors.

Citation: Grossman, Gene M., and Elhanan Helpman. 1995. Trade wars and trade talks. Journal of Political Economy 103(4): 675-708.
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Abstract: Whether governments clash in trade disputes or negotiate over trade agreements, their actions in the international arena reflect political conditions back home. Previous studies of cooperative and non-cooperative trade relations have focused on governments that are immune from political pressures and act as benevolent servants of the public interest. Here we take a first step towards introducing domestic politics into the analysis of international economic relations. We study the interactions between national leaders who are concerned both with providing a high standard of living to the general electorate and collecting campaign contributions from special interest groups. The analysis reveals the determinants of the structure of protection in a non-cooperative trade war and in a cooperative trade agreement.
Published Version: doi:10.1086/261999
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at
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