Trade wars and trade talks

G. M. Grossman, E. Helpman

Research output: Contribution to journalArticlepeer-review

344 Scopus citations

Abstract

Here the authors introduce domestic politics into the analysis of international economic relations. The interactions between national leaders who are concerned with both providing a high standard of living to the general electorate and collecting campaign contributions from special-interest groups are studied. The analysis sheds light on the determinants of the structure of the protection in noncooperative and cooperative policy equilibria. A formal framework capable of capturing both strategic interaction between interest groups and politicians in the domestic arena and strategic interaction between governments in the international arena is developed. Both noncooperative and cooperative tariff-setting games in a context in which domestic politics determine international objectives are studied. The goal is to understand how the political climate in one country conditions policy outcomes in another, and how domestic political pressures on politicians condition their relations with foreign counterparts. -from Authors

Original languageEnglish (US)
Pages (from-to)675-708
Number of pages34
JournalJournal of Political Economy
Volume103
Issue number4
DOIs
StatePublished - 1995

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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