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Q. There is frequently a conflict between short-term and long-term interests in trade. Discuss.
Answer: In trade models that the short term is usually defined as that (conceptual) period of time in which both the amount and the technology of factors of production are given and cannot be changed. When we state that free trade is able to be shown to be an optimal policy under certain circumstances, we signify that in the short run, this policy is able to bring a country to an optimum level of consumption.
Though, there is no irregularity in the proposition that the optimum short run solution may not be the solution, which maximizes the probability of economic expansion or growth (the long run). For instance, a policy which maximizes expenditure may not take into account inter-temporal preferences, and therefore may "short-change" future generations or those who care for future generations.
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