In an environment in which home firm costs are private information, home firm output can signal these costs to a foreign competitor and a home policy maker. High-cost home firms have an incentive to misrepresent themselves as low-cost. This is understood by the foreign firm and the home policymaker and results in the first period optimal per-unit output subsidy to the home firm being less than it would be if home firm output was not a signal of home firm costs. These results are extended to the case of simultaneous signalling and signalling through price.
Trade flows and trade policies need to be properly quantified to describe, compare, or follow the evolution of policies between sectors or countries or over time. This is essential to ensure that policy choices are made with an appropriate knowledge of the real conditions. This practical guide introduces the main techniques of trade and trade policy data analysis. It shows how to develop the main indexes used to analyze trade flows, tariff structures, and non-tariff measures. It presents the databases needed to construct these indexes as well as the challenges faced in collecting and processing these data, such as measurement errors or aggregation bias. Written by experts with practical experience in the field, A Practical Guide to Trade Policy Analysis has been developed to contribute to enhance developing countries' capacity to analyze and implement trade policy. It offers a hands-on introduction on how to estimate the distributional effects of trade policies on welfare, in particular on inequality and poverty. The guide is aimed at government experts engaged in trade negotiations, as well as students and researchers involved in trade-related study or research. An accompanying DVD contains data sets and program command files required for the exercises. Copublished by the WTO and the United Nations Conference on Trade and Development
Focuses on trade policy issues in the era of globalization. This work deals with international trade issues, discusses the literature on the subject, and explores major controversies. It is suitable for researchers, academics, policymakers and practitioners concerned with international trade policy.
