The paper studies the dynamic welfare and macroeconomic effects of a revenue-neutral strategy of offsetting tariff reductions with increases in destination-based consumption taxes. To this end, we employ a dynamic general equilibrium model of a small open developing economy, featuring endogenous...

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...

The paper examines the fiscal issues which may arise from globalisation and trade liberalisation in the smaller economies of Latin America and the Caribbean. Their dependence on trade taxes for fiscal revenues is not only the result of history, but is also based on cost effectiveness. The...