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This paper introduces the concept of a steepest ascent tariff reform for a small open economy. By construction, it is locally optimal in that it yields the highest gain in utility of any feasible tariff reform vector of the same length. Accordingly, it provides a convenient benchmark for the...
Persistent link: https://www.econbiz.de/10012779695
country's relative size or relative average productivity. Furthermore, in the two-country Nash equilibrium, tariffs turn out … to be strategic substitutes. Small or poor economies set lower Nash tariffs than large or rich ones. Lower transportation … costs or smaller fixed market entry costs induce higher equilibrium tariffs and larger welfare losses relative to the case …
Persistent link: https://www.econbiz.de/10013124179
This paper presents a simple, basic model to compute the welfare consequences of the introduction of a tariff on the CO2 content of imported goods in a country that already imposes a domestic carbon tax. The main finding is that the introduction of a carbon import tariff increases global welfare...
Persistent link: https://www.econbiz.de/10013070638
political debate about unilateral climate policies. Tariffs on the carbon embodied in imported goods from countries without … introduction of carbon tariffs can do more harm than good to domestic EITE industries. Two determinants drive the sign and … imported in intermediate inputs, industries might suffer from carbon tariffs. Secondly, the share of domestic output that is …
Persistent link: https://www.econbiz.de/10013055363
Carbon tariffs are one prominently discussed climate policy. The proponents stress the carbon tariffs' ability to … restore competitiveness, avoid carbon leakage, and reduce world carbon emissions. We analyze the effects of carbon tariffs on … trade, welfare, and carbon emissions in a structural gravity model. We find that the introduction of carbon tariffs reduces …
Persistent link: https://www.econbiz.de/10013034209
If a free trade agreement (FTA) is characterized by the exchange of market access with a large and competitive trading partner, the agreement can cause a leakage of protectionist benefits to domestic industry from lobbying against external tariff cuts. This rent destruction effect of an FTA can...
Persistent link: https://www.econbiz.de/10013098332
Recent quantitative trade models treat import tariffs as pure cost shifters so that their effects are similar to … iceberg trade costs. We introduce revenue-generating import tariffs, which act as demand shifters, into the framework of … quantification based on countries' observed degrees of openness, tariff revenues, and on the gravity elasticities of tariffs and …
Persistent link: https://www.econbiz.de/10013083872
data on tariffs and trade covering 130 countries. We show that regionalism has delivered limited effective liberalization …
Persistent link: https://www.econbiz.de/10012986236
The literature on indirect tax reforms in pollution-ridden economies is quite limited. This paper, using a model of a small open economy with production and consumption generated pollution, considers the welfare implications of tax reforms within an integrated structure of consumption and...
Persistent link: https://www.econbiz.de/10012753616
We study the optimal combination of corporate tax rate and tax base in a model of a small open economy with heterogeneous firms. We show that it is optimal for the small country's government to effectively subsidize capital inputs by granting a tax allowance in excess of the true costs of...
Persistent link: https://www.econbiz.de/10013120658