Risk Aversion, Terms of Trade Uncertainty and Social-Consensus Trade Policy.
In the Ricardo-Viner model under certainty, some specific factors areharmed by any trade tax, and mo bile factors favor taxes on some-but not all-goods. This paper demonstrates in t he context of the Ricardo-Viner trade model with terms-of-trade uncertainty, that in the presence of incomplete insurance markets a terms-of-trade contingent tr ade tax commitment can improve welfare (without any explicit income redistributi on) for every factor owner. Furthermore,this result holds in both the short run , with factor specificity, and the long run before any investment decision in sp ecificity or mobility has been implemented. Copyright 1986 by Royal Economic Society.
Year of publication: |
1986
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Authors: | Cassing, J H ; Hillman, A L ; Long, N V |
Published in: |
Oxford Economic Papers. - Oxford University Press. - Vol. 38.1986, 2, p. 234-42
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Publisher: |
Oxford University Press |
Saved in:
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