| Empirical evidence for the United States shows that many antidumping petitions are withdrawn before Federal Agencies complete their investigations. Prusa (1992) argues that domestic industries use petitions to induce foreign industries into a collusive agreement. In his model, all antidumping petitions should be withdrawn, which is not the case. The first chapter provides a model in which only some petitions are withdrawn and Prusa's result is just a special case. The decision to withdraw depends on two key parameters: the coordination cost and the bargaining power of domestic and foreign industries. A new dataset is constructed to test the theoretical model on the US experience for the period 1980–1992. The econometric analysis supports the theoretical conclusions of the model.; The second chapter, co-authored with James Anderson, analyzes the fact that trade policy institutions in the US exhibit political pressure deflection—trade policy responsibility is shifted from the Congress to the Executive and to the bureaucracy. Pressure deflection presents a puzzle to the standard models of political economy. Incumbent politicians in this story trade off the interests of the mass of ill-informed voters for contributions from interested lobbies, so why would they build walls between them and the geese which lay golden eggs? This chapter rationalizes pressure deflection as a defense strategy of incumbents, which allows them to conceal their true policy preferences from lobbies who, when disappointed, may render viable a challenger. The chapter uses antidumping—a prominent example of pressure deflection—to illustrate how the mechanism of pressure deflection works.; The third chapter analyzes the effect of trade patterns and specialization on growth and business cycles. Each country monopolistically produces some varieties of a high technology good and a homogenous low technology good. Growth is introduced by increasing the number of varieties of high-technology goods that a country can produce. The model generates intraindustry trade because all varieties are consumed in every country while interindustry trade occurs between low and high technology goods. In this setup, the relevance and compositions of trade flows is analyzed with respect to its impact on growth and business cycles. |
