chapter11 traditional arguments for protection（课件）- 《国际贸易(英文版) 》同步教学（人民大学版）

Chapter 11: Arguments for and against Protection 10-‹#› 11.1 Effects of a Tariff Protection Increase in domestic production Increase in employment of labor and other resources in domestic production Decrease in consumption Increase in government revenue Redistribution of income 10-‹#› 11.2 The Ideal World of First Best Price (P) = Buyers’ private marginal benefit (MB) = Social marginal benefit (SMB) = Sellers’ private marginal cost (MC) = Social marginal cost (SMC) 10-‹#› 11.3 The Realistic World of Second Best Incentive Distortions MB ≠ SMB MC ≠ SMC Externalities Spillover effects 10-‹#› Effects 10-‹#› 11.3.1 Government Polices toward Externalities Two Approaches The tax-or-subsidy approach A. C. Pigou The property-rights approach Ronald Coase 10-‹#› Arthur Cecil Pigou 1877-1959 Ronald H. Coase The Nobel Prizes 1991 10-‹#› 11.3.2 The Specificity Rule It is more efficient to intervene directly at the specific source of distortion. 10-‹#› In a second-best world, a trade barrier can be better than doing nothing, but some other policy instrument is usually more efficient. Key: Identify the specific problem clearly, then use a policy to attack the problem directly. 10-‹#› 11.4 Promoting Domestic Production or Employment Promoting Domestic Employment in an Industry Promoting Domestic Production 10-‹#› Alexander Hamilton 1755–1804 Friedrich List 1789-1846 11.5 The Infant Industry Argument 10-‹#› List was elected to his lagislature in 1820, for advocating reform, he we deported. List lived in the USA in 1825-1834, Hamilton presented his Report on Manufactures to the Congress in 1791, and died in 1804. It was hardly possible that List got the Infant Industry ideas from Hamilton. The validity of the infant industry argument Three questions (1)Is any government policy really needed? (2) If government assistance is needed, what policy is best? (3)