Endogenous Protection within a framework of monopolistic competition á la Dixit y Stiglitz

Revista de Economía y Estadística

Instituto de Economía y Finanzas, Facultad de Ciencias Económicas, Universidad Nacional de Córdoba

Lugar: Córdoba; Año: 2014 vol. LII p. 1 - 1

0034-8066

he author studies the determination of trade policy by considering an imperfect competitive market. The model adopts the political process developed by Grossman and Helpman (1994), but it also takes into account a different economic structure, which is based on the Footloose Capital model. Two new appealing insights come from the consideration of monopolistic competition. Firstly, in this setting the interest group seems to be more worried to persuade the government to set a high tariff when it can charge a low mark-up. Secondly, the initial distribution of industry might also influence the structure of protection in one economy.