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김상기(Sang-Kee Kim),이유환(Yoo-Hwan Lee) 한국무역학회 2023 貿易學會誌 Vol.48 No.6
This study explores the political economy of the decision-making process for the discriminatory foreign trade policies of the United States and the European Union. In the political and economic decision-making process, firms can participate through lobbying, voters can participate through voting, and each political party selects the trade policy to maximize the partys probability of winning in the election. The results of the analysis are as follows. First, when the political philosophy of the political parties is the same, the trade policy of the political parties converges, but when the political philosophy of the political parties is different, they do not converge. Second, each political party proposes an extreme level of the trade policy. Third, the level of social welfare in the case of political economy is always lower than the social welfare in the case of benevolent government.