Tariff Wars and Trade Deals with Costly Government
We study a simple model of tariff wars and trade deals in which government revenue collection and disbursement uses resources. The introduction of costly governments leads to lower non–cooperative tariffs, the possibility that a less costly government may win a tariff war, and fully cooperative trade deals where countries lower tariffs but do not eliminate them, even with lump–sum taxes and transfers.
Year of publication: |
2000-05
|
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Authors: | Burbidge, John B. ; Myers, Gordon M. |
Institutions: | Department of Economics, McMaster University |
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