| Project/Area Number |
03044091
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| Research Category |
Grant-in-Aid for international Scientific Research
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| Allocation Type | Single-year Grants |
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| Section | Joint Research |
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| Research Institution | The Institute of Social and Economic Research (ISER), Osaka University. |
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Principal Investigator |
ONO Yoshiyasu ISER, Osaka University, 社会経済研究所, 教授 (70130763)
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| Co-Investigator(Kenkyū-buntansha) |
NAGATANI Keizo Department of Economics, University of British Columbia, コロンビア大学・経済学部, 教授
メアッツィ フェルディナ パドヴァ大学, 経済学部, 教授
ラヒリ サジャール エセックス大学, 経済学部, 教授
イートン ジョナサン ボストン大学, 経済学部, 教授
MEACCI Ferdinando Department of Economics, University of Padova
EATON Jonathan Department of Economics, Boston University
LAHIRI Sajal Department of Economics, University of Essex
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| Project Period (FY) |
1991 – 1992
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| Project Status |
Completed (Fiscal Year 1992)
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| Budget Amount *help |
¥3,500,000 (Direct Cost: ¥3,500,000)
Fiscal Year 1992: ¥2,000,000 (Direct Cost: ¥2,000,000)
Fiscal Year 1991: ¥1,500,000 (Direct Cost: ¥1,500,000)
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| Keywords | Oligopoly / Voluntary Export Restraint / GATT Rule / Foreign Asset Position / Welfare / Dynamic Trade Model / International Spill-Over Effect / GATTル-ル |
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| Research Abstract |
This project consists of three parts : 1. International Trade in an Oligopolistic Open Economy (with S. Lahiri), 2. International Strategic Policy Interdependence in the Context of the GATT Regime (with J. Eaton), and 3. International Spill-Over Effects of Various Policies in a Dynamic Optimization Framework (with S. Ikeda, A. Shibata, etc.).
1. A two-country model with one competitive and one Cournot-oligopolistic sector is examined. If free entry is allowed in the oligopoly sector, both factor price equalization and the standard result on comparative advantage hold. Furthermore, in addition to the standard gains from trade, opening trade benefits a country through a reduction in the degree of monopoly. Next, using an oligopoly model with endogenous R&D investment and a marginal-cost differential between oligopolists, the effect of eliminating a firm on the world welfare is examined. Surprisingly, monopoly results in a higher world welfare than Cournot duopoly.
2. The threat of the exporting country's retaliation approved by GATT makes it advantageous for both the exporting and importing countries to establish an OMA. By designing an OMA under which its deadweight loss is appropriately distributed to them, they avoid the retaliation approved by GATT which causes an additional deadweight loss.
3. By applying dynamic optimization behavior to a two-country economy, the effects of various policies (e.g. fiscal spending, an asset-holding tax, a corporate tax, etc.) and supply-side shocks on the paths of consumption, foreign asset position and each country's welfare are explored. The welfare effect consists of the intratemporal terms-of trade (the relative price) effect and the intertemporal terms-of-trade (the interest rate) effect. Thus, even if a country's policy promotes import and improves a foreign country's terms of trade, the foreign country may be worse off depending on its foreign asset position.
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