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Import Quotas and the Product Cycle

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  • David Dollar

Abstract

This paper uses a dynamic general equilibrium model of the product cycle in North-South trade to analyze the short-run and long-run effects of import quotas imposed in the North on manufactured goods from the South. The short-run effects are predictable: real wages in the North may rise as a result of the protection, though even this is not certain if the South captures the quota rents. The long-run effect of the protection is to unambiguously reduce real wages in the North because the quotas artificially increase production costs in the North relative to the South, accelerating the transfer of technology and capital from North to South.

Suggested Citation

  • David Dollar, 1987. "Import Quotas and the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(3), pages 615-632.
    • Handle: RePEc:oup:qjecon:v:102:y:1987:i:3:p:615-632.
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    File URL: http://hdl.handle.net/10.2307/1884220
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    Cited by:

    1. Debasis Mondal & Manash Gupta, 2006. "Innovation, Imitation and Intellectual Property Rights: A Note on Helpman's Model," Journal of Economics, Springer, vol. 87(1), pages 29-53, January.
    2. Debasis Mondal & Manash Ranjan Gupta, 2006. "Product development, imitation and economic growth: A note," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 15(1), pages 27-48.
    3. Manash Ranjan Gupta & Priya Brata Dutta, 2019. "International Tourism in a North–South Model: A Theoretical Analysis," Foreign Trade Review, , vol. 54(2), pages 91-114, May.

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