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We derive a small open economy (SOE) as the limit of an economy as the number or size of its trading partners goes to infinity and trade costs also go to infinity. We obtain this limit in the Armington, Eaton-Kortum, Krugman, and Melitz models. In all cases, the trade of the SOE with the foreign...
Persistent link: https://www.econbiz.de/10013334441
Import tariffs tend to be higher for final goods than for inputs, a phenomenon commonly referred to as tariff …-maximizing tariffs are uniform across sectors. We show that tariff escalation can be rationalized on efficiency grounds in the presence … up the chain for final-good tariffs, input tariffs may drive final-good producers to relocate abroad, mitigating their …
Persistent link: https://www.econbiz.de/10013334443
We measure the importance of increasing returns to scale and trade in medical services. Using Medicare claims data, we document that "imported" medical care -- services produced by a medical provider in a different region -- constitute about one-fifth of US healthcare consumption. Larger regions...
Persistent link: https://www.econbiz.de/10014247951
The incorporation of increasing returns and imperfect competition into applied general-equilibrium (AGE) models, beginning with Harris (1984), led to much larger welfare effects from changes such as trade liberalization. But the imperfect competition side of these IO developments has often...
Persistent link: https://www.econbiz.de/10014250198
Yes. We state closed-form expressions for steady state gains from trade that apply in a class of dynamic trade models that includes dynamic versions of the Krugman (1980), Melitz (2003), and customer capital (e.g., Arkolakis, 2010) models. The gains are a function of the domestic trade share and...
Persistent link: https://www.econbiz.de/10014576594
What kind of tariff reform is likely to raise welfare in situations where tariff revenue is important? Uncertainty about specification and risk from imprecise parameter estimates of any particular specification reduce the credibility of simulation estimates. A promising alternative is to develop...
Persistent link: https://www.econbiz.de/10012458911
decline in import growth. We then construct measures of export exposure to import tariffs by linking tariffs paid by importing …
Persistent link: https://www.econbiz.de/10014337835
in import tariffs, and we apply this method to the United States. Tariff revenue is assumed to be distributed on a per …-capita basis, so states with greater production will experience a welfare gain from tariffs on those products (due to rising … states benefitted from reduced tariffs, with national welfare gains of $5.8 billion or $50 per household in 2017. These …
Persistent link: https://www.econbiz.de/10015072948
This paper proposes a new framework to study the distribution of taxes and the effects of tax reforms, connecting classical tax incidence analysis to optimal tax theory. To study the distribution of current taxes, labor taxes are assigned to the corresponding workers, capital taxes to the...
Persistent link: https://www.econbiz.de/10014437043
We estimate a model of firm export dynamics featuring cross-country complementarities. The firm decides where to export by solving a dynamic combinatorial discrete choice problem, for which we develop a solution algorithm that overcomes the computational challenges inherent to the large...
Persistent link: https://www.econbiz.de/10014337843