Protection for Sale or Surge Protection?
42 Pages Posted: 17 May 2006
Date Written: March 2006
This paper asks whether the results obtained from using the standard approach to testing the influential Grossman and Helpman protection for sale (PFS) model of political economy might arise from a simpler setting. A model of imports and quotas with protection occurring in response to import surges, but only for organized industries, is simulated and shown to provide parameter estimates consistent with the protection for sale framework. This suggests that the standard approach may be less of a test than previously thought.
Keywords: Menu Auctions, Political Economy, Testing Protection for Sale
JEL Classification: F13, D72, B41
Suggested Citation: Suggested Citation