Questions tagged [subsidies]

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32 views

Can a rescue package be considered as a subsidy to the industry?

In the BBC article, France announces €8bn rescue plan for car industry, it is mentioned that the car industry will be given a rescue package to avoid unemployment. Would this be considered as a ...
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0answers
19 views

Is there a standard term for this tradeoff when subsidizing: inducing dependence vs providing support?

I've often heard it informally argued "people will become lazy if you give them handouts". Although I doubt the economic sophistication of most such assertions, I do think they have a real point: you ...
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1answer
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Can there exist something that subsidises that is not a subsidy

Is the set of subsidies exactly the same as the set of things that subsidise? Put another way: can there exist something that subsidises that is not a subsidy? Or are there two definitions of a ...
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1answer
41 views

Why does China spend so much on agricultural/farming subsidies?

I use the OECD's Total Support Estimates (TSE), which I think is a proper measure of total agricultural subsidies (but correct me if I'm wrong). China's TSE is by far the largest at \$239B in 2017 ...
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1answer
511 views

What are production limiting programmes?

Under WTO domestic support norms, blue box measures include: Direct payments under production limiting programmes (often referred to as “Blue Box” measures) are exempt from commitments if such ...
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2answers
139 views

Welfare status when a positive externality is subsidised

I was wondering if there is still welfare loss for example there is a positive externality in production of a good and the government decides to subsidise the good? I think it does still have ...
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1answer
97 views

Is undervaluing environmental impact a subsidy?

This is in relation to a recent question on skeptics which to me seems to broil down to whether you accept that form of accounting, i.e. consider undervaluing environmental impact a hidden subsidy. ...
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1answer
49 views

How to find the market equilibrium by surplus maximisation when there is a consumer subside?

Let's assume a market with linear demand and supply functions, let's say $Q_d = 20 - 4p$ and $Q_s = -4 +8p$ respectively. We can easily find the market equilibrium by either setting $Q_d = Q_s$ (or $...
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1answer
92 views

How is it possible that shipping of eBay items from China to US is 'free'?

How is it possible that Chinese vendors are able to ship a small / light $3 part to a doorstep in the US for free? When shipping items the opposite way via USPS it is often greater than the cost of ...
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1answer
58 views

How are petro states able to maintain gasoline subsidies without black market export smuggling?

I don't understand how petro states can have crazy low gasoline prices without smugglers exporting the gasoline and selling it elsewhere. For example, in Venezuela the domestic price of gasoline is ...
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2answers
178 views

Why does the European Union give subsidies to farmers?

According to neoclassical economics, subsidies are a solution to correct for the existence of externalities in consumption or production. What is the economic rationale/justification for such ...
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2answers
106 views

How does the U.S agriculture subsidy not constitute export subsidies under the WTO?

The WTO explicitly prohibits subsidies on export goods to prevent dumping and market distortion but the United States spends $2.4 Billion annually on corn subsidies ...
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2answers
1k views

Does China subsidize its exports?

And if so, to what extent? Also, how does the extent of China's subsidies compare internationally? (I understand this is a broad question but I can imagine that some economists somewhere have come ...
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1answer
66 views

why subsidy is given why not govt direct discount the prices? [closed]

I have a great confusion about the fundamental of subsidy . Why government give subsidy when it can also discount the price but it doesn't do so ?
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0answers
1k views

Price Floors and Subsidies

Why would a government choose to impose a price floor for agricultural commodities when subsidies would prove to be more beneficial for not only consumers, but also the government itself, since they ...
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1answer
1k views

Calculating the impact of a per-unit Subsidy given to Consumers?

I am somewhat confused about the concept of calculating the prices payed by consumers and producers after a subsidy has been applied. For example, say a good is being traded at 100 dollar at the ...
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4answers
827 views

Do the donated NFL losing team shirts destroy local economies?

I've recently become aware of the fact that the NFL prints both championship teams' shirts in advance to satiate incredible demand -- but instead of destroying the losing teams' shirts like they used ...
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1answer
107 views

Are there economic policies that help countries fight corruption?

Are there particular taxes or subsidies or public goods that a country's economic authority could implement to help in the fight against corruption? While the rule of law seems to be the first order ...