Premium
Trade Policies and Industrialisation *
Author(s) -
FALVEY RODNEY E.
Publication year - 1978
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1978.tb00335.x
Subject(s) - industrialisation , subsidy , commodity , economics , industrial policy , manufacturing sector , developing country , international economics , international trade , business , market economy , economic growth
In this paper, the three‐commodity model of Gruen and Corden is used to examine the effects of import restriction policies designed to promote industrial development. It is shown that under circumstances which might reasonably be expected to exist in developing economies such policies will likely appear successful in the short run, but may fail in the long run, if the import‐competing sector's expansion is largely achieved by the diversion of resources from an infant manufacturing sector producing exportables. An export subsidy is the more appropriate policy under these circumstances.