Sunday, July 17, 2022

export subsidy on the home country is decidedly negative (WTO)

 (The overall impact of the export subsidy on the home country is decidedly negative. Domestic consumers
pay a higher price for a product that they are blocked from sourcing at a lower price from the world
market. This leads to welfare losses for consumers. Domestic producers are direct beneficiaries from the
policy, since their production has expanded as a result of the subsidy.
 

Consumers in the foreign country benefit from lower world prices. Foreign producers, however, are net
losers, since they now have to compete with the lower prices. Uncompetitive producers will be forced
to exit the industry. Overall, however, the country is better off, since the increased benefit to consumers
offset the loss to the producers. )

Ertinya negara rugi.

https://www.wto.org/english/res_e/booksp_e/anrep_e/wtr06-2c_e.pdf

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