000			02453cam a22003137 4500
001			w3600
003			NBER
005			20211020114707.0
006			m o d
007			cr cnu||||||||
008			210910s1991 mau fo 000 0 eng d
100	1		_aAizenman, Joshua. _94613
245	1	0	_aTrade Reforms, Credibility, and Development / _cJoshua Aizenman.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c1991.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w3600
500			_aJanuary 1991.
520	3		_aThis paper analyzes the role of investment policies in regimes undergoing trade liberalization with policy makers of uncertain credibility. We consider an economy producing exportable and importable goods. The economy is liberalized, and tariffs are eliminated. The public views the reform credibility as questionable, and expects the possibility of future policy reversal. The policy maker sets policies and public investment as to maximize the expected utility of a risk averse representative agent. We identify the need to tax private investment in the importable sector, and to subsidize private investment in the outward-oriented sector. We show that the signaling effect of public investment nay generate a positive externality for public investment in the outward sector, and a negative externality for public investment in the inward-oriented activity. We demonstrate that the elimination of sectorial private investment policies call for a rise in the public/private capital ratio in the outward-oriented activities, and a drop in that ratio in the inward-oriented activities. In the presence of an external credit ceiling, a higher degree of risk aversion increases the magnitude (without changing the nature) of the policies.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aF - International Economics _2Journal of Economic Literature class.
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w3600.
856	4	0	_uhttps://www.nber.org/papers/w3600
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w3600
942			_2ddc _cW-PAPER
999			_c344897 _d303459