Trade Wars and Trade Talks
Grossman, Gene M.
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CitationGrossman, Gene M., and Elhanan Helpman. 1995. Trade wars and trade talks. Journal of Political Economy 103(4): 675-708.
AbstractWhether 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.
Citable link to this pagehttp://nrs.harvard.edu/urn-3:HUL.InstRepos:3450062
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