Jan Tuinstra Bücher

The book delves into the unresolved question of how economic equilibria are achieved within the framework of economic theory. It explores various approaches and perspectives on this complex issue, aiming to shed light on the mechanisms that drive markets towards equilibrium. Through detailed analysis and discussion, it seeks to provide insights that could advance understanding in the field of economics.

We develop a simple two-region, cobweb-type dynamic equilibrium model to demonstrate the existence of optimal trade barriers. A pure comparative statics analysis of our model suggests that a reduction of trade barriers always enhances welfare. However, taking a dynamic perspective reveals that nonlinear trade interactions between the two regions may generate endogenous price fluctuations which can hamper both consumer and producer surplus. Finally, we allow special interest groups, such as consumers or producers from the two regions, to lobby for a particular level of trade barriers. Our model predicts that time-varying trade barriers may be another channel for market instability.