Questions tagged [subsidies]

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6
votes
4answers
868 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 ...
4
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2answers
2k 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 ...
4
votes
1answer
109 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 ...
4
votes
2answers
109 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 ...
3
votes
1answer
104 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. ...
2
votes
2answers
197 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 ...
2
votes
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 ...
2
votes
1answer
94 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 ...
2
votes
1answer
33 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 ...
2
votes
1answer
48 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 ...
2
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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 ...
1
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2answers
103 views

Why could a CO2 producer in the UK not just increase its price to match input price increases?

I'm confused about this UK story of the need for government intervention to "bail out" a CO2 producer: The UK government has agreed to subsidize a major US fertilizer manufacturer at a cost ...
1
vote
1answer
72 views

I don't understand how a graph would look like for this situation

If there is a negative production externality of agriculture which is water wastage, and the government provides a 100% subsidy to the farmers so they can buy irrigation gadgets to reduce water ...
1
vote
1answer
733 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 ...
1
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1answer
59 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 $...
1
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0answers
20 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 ...
1
vote
2answers
145 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 ...
1
vote
1answer
74 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 ?
0
votes
1answer
30 views

Subsidies as incentives

The given explanation about how subsidies unintentionally can result in resources being wasted does make sense to me. However, I just wanted a second opinion on my take on this. To me, it seems like a ...
0
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3answers
50 views

Why does lowering the value of yuan against the USD disadvantage the US and benefit China

In this article : https://www.epi.org/blog/trumps-china-tariff-confusion-it-wont-solve-chronic-trade-deficits/ they claim that depreciating the value of the yuan to the USD bolstered China’s economy. ...
0
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1answer
12 views

Why agricultural subsidies were targeted in 1991 Indian Economic Liberalization

In the book Half - Lion: How P.V Narasimha Rao Transformed India, the author mentions that one of the contentious reforms for 1992 were agricultural subsidy reforms. I don't understand how is this ...
0
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1answer
33 views

How to show consumer subsidy (rebate) on supply and demand diagram?

I am currently working on an assignment and needed some help. My assignment requires me to find an article relating to a form of government intervention such as taxes or subsidies and analyse the ...
0
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1answer
60 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 ...
0
votes
1answer
39 views

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 ...