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Quantitative Restrictions on the Flow of Narcotics: Supply and Demand Restraints in a North-South Macro-model

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  • Mansoob Murshed

Abstract

This paper constructs a macroeconomic model of North-South interaction where the flow of narcotics from the South to the North is restricted. Their economic effects are akin to quantitative restrictions in trade policy. Two alternative policy scenarios will be considered. One involves reducing the supply of drugs at source, accompanied by aid. Supply side restrictions have negative aggregate supply side effects in the producing region, because of the monopoly rents generated from that type of control.

Suggested Citation

  • Mansoob Murshed, 2001. "Quantitative Restrictions on the Flow of Narcotics: Supply and Demand Restraints in a North-South Macro-model," WIDER Working Paper Series DP2001-60, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:dp2001-60
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