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AA00260492-19940001-0037.pdf
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Title |
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THE MOST FAVORED NATION CLAUSE
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竹森, 俊平
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タケモリ, シュンペイ
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TAKEMORI, Shumpei
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Agricultural Economics, THE KEIO ECONOMIC SOCIETY Keio University
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Keio Economic Society, Keio University
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1994
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Keio economic studies
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31
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1
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1994
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37
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50
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The paper analyses the implications of the Most Favored Nation Clause in the framework of two-commodity, three-country model, where each country pursues the maximization of its welfare using tariffs as instruments. The paper shows that, paradoxically a country can be better off by renouncing its freedom to choose discriminatory tariffs, because such an action may create a more favorable Nash equilibrium of tariffs. The paper also contradicts the standard presumption that the existence of the Most Favored Nation Clause is beneficial for the world economy.
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