Globally Optimal R&D Subsidy Policy: an Economist s View on the WTO Subsidy Agreement
Globally Optimal R&D Subsidy Policy: an Economist s View on the WTO Subsidy Agreement
- 세종대학교 경제통합연구소
- Journal of Economic Integration
- 제23권 제2호
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2008.06346 - 359 (14 pages)
- 7
We provide economic backgrounds to the Agreement on Subsidies and Countervailing Measures under the World Trade Organization. Permitting R&D subsidy under Article 8 of the Agreement can be interpreted as an inefficient victory of an individual exporting country in the non-cooperative game, harnessing strategic relationship over a foreign rival firm into its domestic industrial policy. In addition, we show that the expiration of Article 8 can be understood as a result of the global optimum, where we maximize the sum of welfares over exporting and importing countries in the symmetric case with a linear demand.
Ⅰ. Introduction
Ⅱ. Basic Model
Ⅲ. Policies on R&D Subsidies
Ⅳ. Conclusion
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