Lectures in Macroeconomics- Charles W. Upton Restricting Trade II

Quotas D S Q1Q1 Q4Q4 PwPw

Restricting Trade II Quotas D S Q1Q1 Q4Q4 PwPw Q2Q2 Q3Q3 P w +T A properly designed quota will have the same effects on imports and consumers as a tariff.

Restricting Trade II Quotas D S Q1Q1 Q4Q4 PwPw Q2Q2 Q3Q3 P w +T A properly designed quota will have the same effects on imports and consumers as a tariff. Tariff revenues go to the US Treasury; the value of quota rights goes to whoever owns the rights.

Restricting Trade II Other Restrictions Voluntary Restrictions –A nation “voluntarily” agrees to limit exports

Restricting Trade II Other Restrictions Voluntary Restrictions Special Import Rules –France and VCR’s –US Trucking

Restricting Trade II Other Restrictions Voluntary Restrictions Special Import Rules Regulatory Rules –McDonalds

Restricting Trade II Other Restrictions Voluntary Restrictions Special Import Rules Regulatory Rules Domestic Content Rules

Restricting Trade II Does the US practice Free Trade? We complain about others practices We impose a lot of restrictions ourselves

Restricting Trade II Does the US practice Free Trade? We complain about others practices We impose a lot of restrictions ourselves –Steel Tariffs –Import Export Subsidies –Byrd Amendment

Restricting Trade II End ©2005 Charles W. Upton. All rights reserved