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Dynamically Consistent Oil Import Tariffs

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  • Larry Karp
  • David M. Newbery

Abstract

The standard solution of the open-loop optimal import tariff is normally time inconsistent. This paper shows why and derives the dynamically consistent Markov perfect tariff. The two tariffs are compared; they differ except for a special class of import demands. The time paths of tariffs and the welfare cost of an inability to commit are calculated for a dominant importer. The welfare costs of the inability to commit are small if its market share is below one-half.

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Bibliographic Info

Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 25 (1992)
Issue (Month): 1 (February)
Pages: 1-21

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Handle: RePEc:cje:issued:v:25:y:1992:i:1:p:1-21

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Citations

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Cited by:
  1. Kenji Fujiwara & Ngo Long, 2011. "Welfare Implications of Leadership in a Resource Market under Bilateral Monopoly," Dynamic Games and Applications, Springer, vol. 1(4), pages 479-497, December.
  2. Santiago J. Rubio, 2004. "On Capturing Oil Rents with a National Excise Tax Revisited," Working Papers 2004.133, Fondazione Eni Enrico Mattei.
  3. Gregory Goering & Michael Pippenger, 2003. "Dynamic consistency and monopoly," Atlantic Economic Journal, International Atlantic Economic Society, vol. 31(2), pages 188-194, June.
  4. Eduardo, Ley & Jessica, Boccardo, 2009. "The Taxation of Motor Fuel: International Comparison," MPRA Paper 19461, University Library of Munich, Germany.
  5. Santiago J. Rubio, 2005. "Tariff Agreements And Non-Renewable Resource International Monopolies: Prices Versus Quantitites," Working Papers. Serie AD 2005-10, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  6. Keutiben, Octave, 2014. "On capturing foreign oil rents," Resource and Energy Economics, Elsevier, vol. 36(2), pages 542-555.
  7. Groot, Fons & Withagen, Cees & de Zeeuw, Aart, 2003. "Strong time-consistency in the cartel-versus-fringe model," Journal of Economic Dynamics and Control, Elsevier, vol. 28(2), pages 287-306, November.
  8. Jean-Philippe Gervais, 2001. "Production uncertainty and trade policy commitment," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 10(1), pages 1-21.
  9. Gervais, Jean-Philippe & Lapan, Harvey E., 2002. "Time consistent export quotas in an oligopolistic world market," Journal of International Economics, Elsevier, vol. 56(2), pages 445-463, March.
  10. Amundsen, Eirik S. & Bergman, Lars, 2005. "International Redistribution of Resource Rents: An alternative perspective on the Kyoto process," MPRA Paper 10624, University Library of Munich, Germany.
  11. Rubio, Santiago J. & Escriche, Luisa, 2001. "Strategic pigouvian taxation, stock externalities and polluting non-renewable resources," Journal of Public Economics, Elsevier, vol. 79(2), pages 297-313, February.
  12. Santiago Rubio, 2011. "On Capturing Rent from a Non-renewable Resource International Monopoly: Prices Versus Quantities," Dynamic Games and Applications, Springer, vol. 1(4), pages 558-580, December.
  13. Gérard Gaudet, 2007. "Natural resource economics under the rule of Hotelling," Canadian Journal of Economics, Canadian Economics Association, vol. 40(4), pages 1033-1059, November.
  14. Amundsen, Eirik Schrøder & Bergman, Lars, 2005. "International Redistribution of Resource Rents: An alternative perspective on the Kyoto process," Working Papers in Economics 08/05, University of Bergen, Department of Economics.
  15. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.

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