B12 Flashcards
Controversies in trade policy
What is the precondition for a justified government intervention in trade
A market failure
Is there a market failure in high tech industries
yes, there is great difficulty in appropriating knowledge and therefor it is hard to justify research and inovation without some degree of protection
Is there a case for tariffs or subsidies in the case of a market failure of impoerfect competition in certain industries
Yes, if an industry is characterised by oligopoly or monopoly it will give excess rents and so it might make sense to make an effort to capture those rents from forigners
What are the critiques of government protection of potential monopolies
There is too little information abotut what the apropriate action wold be and what industries are really natural monopolies, any action would likely invite retaliation and it takes away resources from sectors that the nation might have a better comparative advantage in
What is the effect of globalization on laborers
It benefits exporters of labor intensive goods and is to the detriment of laborers in the importing countries. In practice it is gnerally good for poor laborers and bad for rich laborers
Is globalization bad for the environment
In a way it can be, the increased posibility to consume might tear more on the environment although nations are perfectly capable of destroying their own environment without exporting anything
Is globalization bad for culture
It leads to increased cultural homogineity which is sad in a way but it is up to indiciduals to decide what they consume and how they act, to prevent them is certainly a worse public bad than the cultural reduction
What is the environmental kuznets curve
The observation that as economies grow they first tend to polute a lot more but then decrease their polution as processes become more efficient and serveice consumption becomes more wide spread
What are polution havens
Some areas with lax environmental standards where dirty industries move to cut costs, not as a wide spread practive as one could imagen but still a problem
what are carbon tariffs
A tax based on the environemtal impact of an exported good to wield influence on other potential polution havens, they are of dubious legality as seen by WTO
What can make the resource allocation that ocurrs when a country opens up to trade extra painful
As industries are often concentrated in particular areas due to external economoies of scale opening up to trade not only takes away those jobs if they cannot compete but also the service jobs associated with that area
what are the major critique of carbon or labor regulation tariffs
That they may be abused for protectionism
