海角大神

Maybe Adam Smith and Alfred Marshall didn't figure out all of micro theory. 听Consider the case of solar panel imports from China. 听The NY Times reports that theU.S isa large tariff punishment on these imports. This will hurt Chinese exporters and U.S importers and help U.S producers of panels but it will also impose a global pollution externality. 听A side benefit of the U.S being able to cheap solar panelsis that this increases their adoption and this reduces global GHG emissions. 听In the presence of such a consumption positive externality, does this affect how we think about the economics of dumping? 听 The irony here is that environmentalists should support Chinese dumping (i.e. China selling their green products in the U.S for a really low price).

As I understand the economics of dumping, 听regulators are concerned that exporter prices low now to kill off domestic competition and once the U.S firms are dead will sharply raise prices to monopoly levels and gouge the silly Americans. 听 听Most Chicago economists do not believe this logic. 听If China did achieve market power and tried to take advantage of it, this would trigger entry by some other developing nation who could cheaply mass produce that solar panel technology. 听The "pro-dumpers" implicitly assume that there is some future barrier to entry that prohibits entry into the industry. 听That sounds silly to me.

To repeat this blog post's key point. 听With most goods such as cars, when we import a car there is actually a negative pollution externality so "anti-dumping" laws protect the environment. In the case of products that offer positive externality benefits, 听environmentalists should be bigger fans of free trade and oppose tariffs on such products! 听Free trade and the environment baby! 听Think about it.