9. One argument against free trade is the terms of tradesince an export subsidy worsens the terms,...

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9. One argument against free trade is the terms of trade—since an export subsidy worsens the terms, it has to be conceived as a negative one, a tax paid by foreigners.

However, the optimum export tax is one that maximizes national gain without harming export. How would it work in the case of a commodity exporting country like Indonesia?

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International Finance Theory And Policy

ISBN: 9781292019550

10th Edition

Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz

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