Economics 1022A/B Lecture Notes - Countervailing Duties, Capital Account, Protectionism

• School: Western University
• Department: Economics
• Course: Economics 1022A/B
• Professor: Charles Middleton

Document Summary

Protectionism; have to protect our domestic market : favour domestic industries. But it allows the industry to become inefficient and less competitive. Infant industries; new small industries that need time to grow (need to incubate), need to realize economies of scale and production efficiencies. But difficult to know when and if protection should stop, and is it fair to consumers: domestic employment; using tariffs to keep jobs in canada. But other countries will retaliate and this can lead to trade war: national security; too dependent on foreign products (e. g. oil) But it is possible to stockpile. Limits the supply so that consumers choose domestic goods more often; domestic will be cheaper and more available: but it makes it easier for producers to collude, no revenue collected by the government, consumers pay more. Industries realize that protections make them enough money to spend resources to continue to seek them. Product standards: safety, labeling; nutrition, english/french, care/contents.