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DISC, FSC, and the cost of capital in the export sector

DISC and FSC are two trade policy instruments of the United States that proV'ide a tax incentive for exporting. The two measures provide a stimulus for investment in the export sector by reduci.ng the cost of capital for exporting firms.

According to a model based on the neoclassical theory of optimum capital accumulation, the minimum effect either DISC or FSC can have is surprisingly small, reducing the cost of capital by less than percent in either case. The maximum effect is large, reducing the cost of capital in the export sector by around 20 percent. However, the maximum effect of DISC and FSC is accompanied by side-effects that reduce economic efficiency significantly. These results therefore call into question the effectiveness of DISC and FSC as instruments of trade policy. / Master of Arts

Identiferoai:union.ndltd.org:VTETD/oai:vtechworks.lib.vt.edu:10919/74513
Date January 1985
CreatorsBrumbaugh, David
ContributorsEconomics
PublisherVirginia Polytechnic Institute and State University
Source SetsVirginia Tech Theses and Dissertation
Languageen_US
Detected LanguageEnglish
TypeThesis, Text
Formatiii, 54 leaves, application/pdf, application/pdf
RightsIn Copyright, http://rightsstatements.org/vocab/InC/1.0/
RelationOCLC# 13193584

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