Accession Number:

ADA128425

Title:

Subsidization of East-West Trade through Credit Insurance and Loan Guarantees.

Descriptive Note:

Interim rept.,

Corporate Author:

RAND CORP SANTA MONICA CA

Personal Author(s):

Report Date:

1983-01-01

Pagination or Media Count:

82.0

Abstract:

This study attempts to measure one very widespread type of export subsidy, the export credit guarantees and insurance policies offered by the exporting governments. Section II of the Note gives an overview of some of the most important features and introduces the necessary terminology. Section III concentrates on estimating the perceived probability of nonpayment and the salvage ratio, which are the major determinants of the risk premium that would be charged in a competitive market. The machinery developed in Sections II and III is then applied to estimating the subsidies on exports to the Eastern Bloc in Section IV. Export subsidies are usually justified on the basis that they increase exports--and therefore production, employment, and income--in the exporting country. Section V develops a simple model of the economy that lets the reader determine for which values of subsidy rates and export price elasticites this is indeed true. Some concluding thoughts follow in Section VI. Author

Subject Categories:

  • Administration and Management
  • Economics and Cost Analysis
  • Government and Political Science

Distribution Statement:

APPROVED FOR PUBLIC RELEASE