Dynamic Issues in Applied Commercial Policy Analysis

Economic processes are dynamic, involving decisions that affect resource allocation and production, factor accumulation and depreciation, migration and foreign investment, resource depletion, and consumption. However, while economists have long argued that dynamic effects of policy changes are much more important in the real world than the static effects, this is not reflected in the large majority of applied trade studies. Rather, most applied commercial policy analyses are focused on static effects. This book is concerned with the implications of dynamic processes for the applied modelling of commercial policy. The critical difference between the implicit dynamics of mainstream trade models, which are often suppressed in the formal analytics, and the focus on dynamic issues in this volume, is the explicit specification of dynamic mechanisms. A wide range of modelling approaches is employed in the volume to investigate an even wider range of policy issues, with an overall objective of further extension of the basic conceptual framework of applied commerical policy analysis in the direction of dynamic issues and applications. The book examines dynamic aspects of international trade and investment policy, with contributions from leading international economists. Emphasis is placed on methods for the analysis of interactions between commercial policy and leading policy issues like investment performance, economic growth and innovation, the location of industry, migration, and the environment. The book will be a standard reference for anyone interested in the assessment of international trade and investment policy, and applied study of the dynamic implications of trade policy.