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- Title
Agricultural Productivity, Infrastructures and the Optimal Timing of Opening Trade.
- Authors
Kamei, Keita; Sasaki, Hiroaki
- Abstract
This study develops a dynamic Ricardian trade model that incorporates productive infrastructures into the manufacturing sector. The costs of building infrastructures are financed by tax. We investigate the relationship between the timing of opening trade and total welfare. The main results are as follows: (1) there is the optimal tax rate maximizing the total welfare; (2) an increase in agricultural productivity can accelerate the timing of opening trade, which, however, does not necessarily improve total welfare; and (3) total welfare under specialization in manufacturing can be higher than that under specialization in agriculture depending on the prevailing conditions.
- Subjects
AGRICULTURAL productivity research; RICARDIAN equivalence theorem; MANUFACTURING industries; TAX rates; AGRICULTURE
- Publication
Manchester School (1463-6786), 2016, Vol 84, Issue 5, p621
- ISSN
1463-6786
- Publication type
Article
- DOI
10.1111/manc.12125