THE DETERMINANTS OF TRADE

Consider the market for steel. The steel market is well suited to examining the gains and losses from international trade: Steel is made in many countries’ around the world, and there is much world trade in steel. Moreover, the steel market is one in which policymakers often consider (and sometimes implement) trade restrictions to ‘protect domestic steel .producers from foreign competitors. We examine here the steel market in the imaginary country of Isoland.

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