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TARIFFS VERSUS QUOTAS UNDER UNCERTAINTY : RESTRICTING IMPORTS AND THE ROLE OF PREFERENCE
LAPAN, HARVEY E.,CHOI, E. KWAN 한국국제경제학회 1988 International Economic Journal Vol.2 No.4
This paper analyzes trade policies for a small country facing foreign price uncertainly and domestic production disturbances. The import-induced externality provides a rationale for trade restrictions. When the terms of trade are uncertain, the optimal composite tariff may require a negative ad valorem tariff, but dominates the optimal quota. Moreover, a production subsidy/tax may be combined with a specific tariff, but not with a quota. A general ranking of quotas versus tariffs in the presence of domestic uncertainty depends upon the price elasticity of demand for the importable and the curvatures of the indirect utility and the external damage functions.
Articles : The Optimal Tariff, Time Consistency and Immiserising Growth in a Large Country
( Harvey E. Lapan ) 세종대학교 경제통합연구소 1991 Journal of Economic Integration Vol.6 No.1
It is well-known that immiserising growth cannot occur in a large, non-distorted economy that employs its optimal tariff. However, if production decisions are made before tariffs are irrevocably set, then the conventional optimal tariff is not time-consistent. We show that if a large country employs its time-consistent optimal tariff, then ultra-import biased domestic growth can be immiserising both for the large country and for its foreign trading partners. We also show that if the large country employs its second-best domestic production tax on importables, then immiserising growth cannot occur.
The Optimal Tariff, Time Consistency and Immiserising Growth in a Large Country
Lapan, Harvey E. 세종대학교 국제경제연구소 1991 Journal of Economic Integration Vol.6 No.1
It is well-known that immiserising growth cannot occur in a large, non-distorted economy that employs its optimal tariff. However, if production decisions are made before tariffs are irrevocably set, then the conventional optimal tariff is not time-consistent. We show that if a large country employs its time-consistent optimal tariff, then ultra-import biased domestic growth can be immiserising both for the large country and for its foreign trading partners. We also show that if the large country employs its second-best domestic production tax on importables, then immiserising growth cannot occur.