Free Trade and Its Alternatives
Document Type
Book Chapter
Department
Economics (CMC)
Publication Date
2012
Abstract
This article begins by reviewing the basic case for free trade in terms of the workhorse factor-proportions model. The conclusions of this “benchmark” model are then stress-tested by removing each of the key assumptions in turn. Not surprisingly, the case for free trade becomes less airtight, as a variety of specific market situations arises in which trade-based barriers such as tariffs or nontrade interventions such as production and other subsidies can produce superior welfare outcomes. But these theoretical findings of superiority do not necessarily translate into interventionist policy prescriptions, because in many cases the costs associated with practical implementation may exceed the expected benefits.
Rights Information
© 2012 Oxford University Press
Terms of Use & License Information
DOI
10.1093/oxfordhb/9780195378047.013.0001
Recommended Citation
Arndt, Sven W. 2012. Free Trade and Its Alternatives. In M.E. Kreinin and M.G. Plummer (eds.), Handbook on International Commercial Policy. Oxford: Oxford University Press.
