Optimal Trade Policies and Non-Economic Objectives in Models Involving Imported Materials, Inter-Industry Flows and Nontraded Goods

• Main Author: TAN, Augustine H. H.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 1971
• Subjects: Economics; International Economics
• Online Access: https://ink.library.smu.edu.sg/soe_research/102; https://ink.library.smu.edu.sg/context/soe_research/article/1101/viewcontent/OptimalTrade_1971_pv.pdf
• Institution: Singapore Management University

In a recent paper in this Review, J. Bhagwati and T. N. Srinivasan investigated the question of optimal policies required to attain non-economic objectives like ensuring minimum production and employment levels in particular industries as well as preventing excess importation and consumption of some goods. The framework of Bhagwati Srinivasan's analysis is the traditional trade model. In this note we consider three alternative models which allow for inter-industry linkages, the use of imported intermediate goods and non-traded goods. In addition to the non-economic objectives analyzed by Bhagwati-Srinivasan these models allow distinction between maintaining net and gross production levels as well as between employment of domestic and imported inputs.