GLOBE

The Welfare Effects of Trade Policies
Partial Equilibrium

by Steven Suranovic ©1997-2004

Trade 90-6  

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A partial equilibrium analysis distinguishes between the welfare of consumers who purchase a product and the producers who produce it. Consumer welfare is measured using consumer surplus, while producer welfare is measured using producer surplus. Revenue collected by the government is assumed to be redistributed to others. Government revenue is either spent on public goods or is redistributed to someone in the economy, thus raising the welfare of somebody.

 

 

 

 

 


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International Trade Theory and Policy Lecture Notes: ©1997-2004 Steven M. Suranovic
Last Updated on 4/16/97