Journal Article

Comparative Advantage and Government Budget Effects: An Application to the Grain Trade of the Former USSR

William M. Liefert

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 79, issue 3, pages 715-725
Published in print August 1997 | ISSN: 0002-9092
Published online August 1997 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.2307/1244414
Comparative Advantage and Government Budget Effects: An Application to the Grain Trade of the Former USSR

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A model is developed for analyzing the relationship between trade according to comparative advantage, price policy, and government budget effects. The model is used to examine a debate in the USSR in its last years concerning the economic rationale of grain imports, one concern being government budgetary consequences. It appears that changing the mix of goods produced and traded such that grain imports would fall, which many Soviet economists advocated, would have unintentionally decreased state revenue. This is mainly because empirical evidence indicates that the former USSR had a comparative disadvantage in the production of grain.

Keywords: comparative advantage; former USSR; gains from trade; government revenue; grain trade; F130; F140; P330

Journal Article.  0 words. 

Subjects: International Trade ; Socialist Institutions and their Transitions

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