Loss Aversion And Trade Policy
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Loss Aversion And Trade Policy
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Author : Caroline L. Freund
language : en
Publisher: World Bank Publications
Release Date : 2004
Loss Aversion And Trade Policy written by Caroline L. Freund and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Commercial policy categories.
"Freund and Özden provide new survey evidence showing that loss aversion and reference dependence are important in shaping people's perception of trade policy. Under the assumption that agents' welfare functions exhibit these behavioral elements, they analyze a model with a welfare-maximizing government and with the lobbying framework of Grossman and Helpman (1994). The policy implications of the augmented models differ in three important ways: There is a region of compensating protection, where a decline in the world price leads to an offsetting increase in protection, such that a constant domestic price is maintained; Protection following a single negative price shock will be persistent; Irrespective of the extent of lobbying, there will be a deviation from free trade that tends to favor loss-making industries. The augmented models are more consistent with the observed structure of protection and, in particular explain why many trade policy instruments are explicitly designed to maintain prices at a given level. This paper-- a product of the Trade Team, Development Research Group-- is part of a larger effort in the group to analyze trade policy formulation"-- World Bank web site.
Loss Aversion And Trade Policy
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Author : Caroline L. Freund
language : en
Publisher:
Release Date : 2016
Loss Aversion And Trade Policy written by Caroline L. Freund and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
Freund and Ozden provide new survey evidence showing that loss aversion and reference dependence are important in shaping people's perception of trade policy. Under the assumption that agents' welfare functions exhibit these behavioral elements, they analyze a model with a welfare-maximizing government and with the lobbying framework of Grossman and Helpman (1994). The policy implications of the augmented models differ in three important ways:- There is a region of compensating protection, where a decline in the world price leads to an offsetting increase in protection, such that a constant domestic price is maintained.- Protection following a single negative price shock will be persistent.- Irrespective of the extent of lobbying, there will be a deviation from free trade that tends to favor loss-making industries.The augmented models are more consistent with the observed structure of protection and, in particular explain why many trade policy instruments are explicitly designed to maintain prices at a given level.This paper - a product of the Trade Team, Development Research Group - is part of a larger effort in the group to analyze trade policy formulation.
Loss Aversion And Trade Policy
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Author : Caroline Freund
language : en
Publisher:
Release Date : 2013
Loss Aversion And Trade Policy written by Caroline Freund and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
This paper provides new survey evidence showing that loss aversion and reference dependence are important in shaping people's perception of trade policy. Under the assumption that agents' welfare functions exhibit these behavioral elements, we analyze a model with a welfare-maximizing government and with the lobbying framework of Grossman and Helpman (1994). The policy implications of the augmented models differ in three important ways. One, there is a region of compensating protection, where a decline in the world price leads to an offsetting increase in protection, such that a constant domestic price is maintained. Two, protection following a single negative price shock will be persistent. Three, irrespective of the extent of lobbying, there will be a deviation from free trade that tends to favor loss-making industries. The augmented models are more consistent with the observed structure of protection, and in particular, explain why many trade policy instruments are explicitly designed to maintain prices at a given level.
Risk Aversion Terms Of Trade Uncertainty And Trade Policy
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Author : James H. Cassing
language : en
Publisher:
Release Date : 1985
Risk Aversion Terms Of Trade Uncertainty And Trade Policy written by James H. Cassing and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1985 with Commerce categories.
Food Prices And The Multiplier Effect Of Trade Policy
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Author : Paolo Giordani
language : en
Publisher: International Monetary Fund
Release Date : 2014-09-26
Food Prices And The Multiplier Effect Of Trade Policy written by Paolo Giordani and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-09-26 with Business & Economics categories.
This paper studies the relationship between trade policy and food prices. We show that, when individuals are loss averse, governments may use trade policy to shield the domestic economy from large food price shocks. This creates a complementarity between the price of food in international markets and trade policy. Specifically, unilateral actions give rise to a "multiplier effect": when a shock drives up the price of food, exporters respond by imposing restrictions while importers wind down protection, thus exacerbating the initial shock and soliciting further trade policy activism. We test the key prediction of the theory with a new dataset that comprises monthly information on trade measures across 77 countries and 33 food products for the period 2008-11, finding evidence of a multiplier effect in food trade policy. These findings contribute to inform the broader debate on the proper regulation of food trade policy within the multilateral trading system.
Trade Policy Income Risk And Welfare
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Author : Tom Krebs
language : en
Publisher: World Bank Publications
Release Date : 2005
Trade Policy Income Risk And Welfare written by Tom Krebs and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Commercial policy categories.
"This paper studies empirically the relationship between trade policy and individual income risk faced by workers, and uses the estimates of this empirical analysis to evaluate the welfare effect of trade reform. The analysis proceeds in three steps. First, longitudinal data on workers are used to estimate time-varying individual income risk parameters in various manufacturing sectors. Second, the estimated income risk parameters and data on trade barriers are used to analyze the relationship between trade policy and income risk. Finally, a simple dynamic incomplete-market model is used to assess the corresponding welfare costs. In the implementation of this methodology using Mexican data, we find that trade policy changes have a significant short run effect on income risk. Further, while the tariff level has an insignificant mean effect, it nevertheless changes the degree to which macroeconomic shocks affect income risk"--NBER website
International Trade Policy With Imperfect Competition
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Author : Richard W. T. Pomfret
language : en
Publisher:
Release Date : 1992
International Trade Policy With Imperfect Competition written by Richard W. T. Pomfret and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1992 with Business & Economics categories.
Fundamentals Of U S Foreign Trade Policy
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Author : Stephen D Cohen
language : en
Publisher: Westview Press
Release Date : 2003
Fundamentals Of U S Foreign Trade Policy written by Stephen D Cohen and has been published by Westview Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with Political Science categories.
Cohen, Blecker, and Whitney (professors of international relations and economics at American U.) see the formation of U.S. trade policy is seen as a combination of competing forces of political, economic, and legal factors. They attempt to show how trade policymaking involves reconciling a range of economic goal and political necessities. After reviewing the history of trade policymaking in the United States, they separately examine the three factors before integrating them into a model of political economy that explores both import and export policy. Annotation copyrighted by Book News, Inc., Portland, OR
Law Psychology And Morality
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Author : Eyal Zamir
language : en
Publisher: Oxford University Press, USA
Release Date : 2015
Law Psychology And Morality written by Eyal Zamir and has been published by Oxford University Press, USA this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with Law categories.
Prospect theory posits that people do not perceive outcomes as final states of wealth or welfare, but rather as gains or losses in relation to some reference point. People are generally loss averse: the disutility generated by a loss is greater than the utility produced by a commensurate gain. Loss aversion is related to such phenomena as the status quo and omission biases, the endowment effect, and escalation of commitment. The book systematically analyzes the relationships between loss aversion and the law.
Political Economy Of Agricultural Trade Related Policies In China
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Author : Wenshou Yan
language : en
Publisher: World Scientific
Release Date : 2020-09-10
Political Economy Of Agricultural Trade Related Policies In China written by Wenshou Yan and has been published by World Scientific this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-09-10 with Political Science categories.
This book seeks to understand the simultaneous economic and political contributors to China's changing agricultural protection levels and the central government's choice of policy instruments to tax or assist farmers. It theoretically explores the motivation behind agricultural trade-related support policies through extending the two-sector specific factors production model to three sectors, so as to make it more relevant for a one-party state such as China. Chapter three tests that theory empirically, using panel data on agricultural distortions for the period 1981 to 2010 from Anderson and Nelgen (2013). The long-running trend in the level of assistance to the farm sector sees considerable fluctuations in support each year, which has been attributed to fluctuations in international prices of agricultural products. Chapter four seeks to explain the Chinese government's responses to world market price fluctuations. In practice, the government does have other instruments besides trade restrictions to alter domestic producer and consumer prices in the face of fluctuating international prices. Chapter five explores the role that public storage policy can play in contributing to the government's objective of stabilizing the domestic market price of farm products. The final chapter of the book draws out implications for policymakers in China and elsewhere.