Short Essay on the Effects of Dumping


February 1, 2019 admin 0 Comment

In contrast, predatory or sporadic dumping is more likely to be disruptive for the importing country. Producers in the importing country face a slump in demand with disastrous spill-over effects for the rest of the economy.

The effects are more damaging for a small country because of its inability to quickly restructure itself. Its growth process receives a setback on account of reduced output, income and domestic investment.

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Its foreign exchange reserves may also register a dip. Though consumers may appear to benefit from dumping, even they suffer in the long run when the price of the dumped good is increased later, unless the goods in question are consumer durables with lifetime-use capability.

Equally relevant is the type of commodity being dumped. If it is a new product, it promotes consumerism which exerts a dampening effect on domestic saving and capital accumulation. The ill-effects of dumping get multiplied if the dumped item is a junk food or a health-hazard, etc.



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