SOCI 235 Lecture Notes - Lecture 25: Comparative Advantage, Dynamic Efficiency, Corning Inc.
10 Dec 2014
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Trade policy in japan: western approaches to trade policy tend to be framed by the principle of comparative advantage: countries are better off if they specialize in what they do best and then trade. So, tariffs and quotas that restrict trade, and subsidies to exporters that push local producers into markets for which they have no natural aptitude, will make a country"s population worse off. In the short term governments may influence interest rates for countercyclical purposes. : johnson, tyson, and zysman (jt&z - politics and productivity, 1989) argue that japan violated all of these policy precepts. There has been something like economic planning involving picking industrial sectors to develop and then assisting those sectors with subsidies, among other things. There was a long history of failing to develop or implement antitrust policy. Suppose some industries are subject to less international competition than others. Those industries are likely to generate higher wages.
