This paper develops a model of small open economy, with a differentiated goods sector and voluntary provisioning of public good. It is shown that trade policy can alter the quantity of public good provided in the equilibrium. Interestingly, tariffs may fail to protect, leading to a Metzler...

In models of monopolistic competition with a single factor of production, imposition of tariff can lead (paradoxically) to a drop in the aggregate price index of the import competing sector. The present model first introduces an internationally mobile capital in such a set up. It is found that...

This paper develops a model of small open economy, with a differentiated goods sector and voluntary provisioning of public good. It is shown that trade policy can alter the quantity of public good provided in the equilibrium. Interestingly, tariffs may fail to protect, leading to a Metzler...

This paper considers the relative efficiency of unit tax and ad valorem tax in Cournot doupoly in the presence of licensing opportunities after the announcement of the tax rates by the government. Anderson et al. (2001) shows that in such a case ad valorem tax welfare dominates the unit tax....