Dynamic Studies of Trade Policy: Comparative Studies of Tariff/Quota Free Trade

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The contributions resulted from this research consist of two parts. The first part is in those articles listed in reference #1, #2 and a chapter of the edited volume. The main text is in the book which is edited by Alan Woodland and published from Edgar Elgar 2002. The paper #1 gives the mathematical proofs of the results in the main text. And the paper #2 states the contribution of the main text, and at the same time develops the issues to be discussed.The second part of the research is to develop a model of endogenous trade policy and its analysis is carefully developed by using a multi stage game model so as not to have time inconsistency. The model is not a simple trade policy model, but it combines with political economy characteristics. The chosen trade policy is the outcome of the political competition between protectionist party and liberal party. The theoretical results are applied to the post War Japanese politics in terms of trade policy to test robustness of it.The final ye … More ar of the study than main researcher had chances to have seminars at various universities and an international conference. The short abstracts of the two parts of our contributions are following.1. We extend the existing strategic trade policy model to incorporating increasing returned to scale, i.e. decreasing average production cost. The two countries engage in imperfect substitutes trades with each other, and in Cournot competition. Under some condition subsidy improves world welfare. This does not necessary to means that free trade is less desirable. The contribution is a generalization of the existing analytical model.A dynamic political model of trade policy in the long term is developed as the second topic. An endogenous trade policy model is combined with a political economy model. One feature which is missing in traditional neoclassical analysis is cultural aspect. We consider political culture and commercial culture as important determinants of economy. Multi stage game is expanded, and the theoretical results are tested by applying to the stylized facts of post War Japanese politics. We find that the model well fits to it. Less