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- Title
Effects of Tariffication: Tariffs and Quotas under Monopolistic Competition.
- Authors
Jørgensen, Jan; Schröder, Philipp
- Abstract
Recent rounds of GATT and later WTO have advocated widespread tariffication, meaning that existing non-tariff barriers be converted into import equivalent tariffs. From an economic point of view, the effects of such tariffication are not entirely clear. The paper presents a trade model with monopolistic competition to examine the welfare effects of tariffication. The ranking of pre- and post-tariffication welfare crucially depends on the nature of the initial trade barrier and the tariff tool applied. Tariffication using a specific (ad valorem) tariff results in the same (reduced) welfare level compared to an initial sold quota, whereas welfare is increased (the same) compared to an initial shared quota.
- Subjects
TARIFF; CUSTOMS unions; INTERNATIONAL economic integration; COMMERCIAL policy; INDIRECT taxation; EXPORT subsidies; COMPARATIVE advantage (International trade); TRADE regulation; MONOPOLISTIC competition; INTERNATIONAL trade
- Publication
Open Economies Review, 2007, Vol 18, Issue 4, p479
- ISSN
0923-7992
- Publication type
Article
- DOI
10.1007/s11079-007-9025-9