Title: Ranking of price and quantitiy [sic] controls
Description: "Consider an open economy facing to an uncertain export market for its products. Assuming the balance of payments being always in equilibrium, the economy has three alternative means of maximizing its national product: export price setting, export quota and import quota. It is easy to infer the equivalence of thise control means in the sense that if optimally set they realize the same level of maximized national income in the absence of uncertainty. However, uncertainties break the equivalence and controls may be ranked one way or another. The existing literature on the subject is totally of static nature. We ask what happens if the economy faces much complicated, ever-changing and volatile trading world with uncertainty? Can we simply infer that conclusions in the static model carry over to any dynamic settng of an open economy? By modeling the uncertainty with Browniam motion, the paper shows if and when three controls are equivalent ahd how they can be ranked if they are not."--Abstract title page.
Subjects: Balance of payments, Mathematical models, Import quotas, Brownian motion processes, National income, Exports, Prices