Stochastic trade policy with asset markets : The role of tariff structure
AbstractThis paper uses a Stockman-Dellas type two-country, two-good, stochastic general equilibrium model to consider the effects of commercial policy when asset markets are complete. We show that: (i) import and export tariffs do not have symmetric effects because interstate relative prices depend on the entire tariff structure; (ii) when commercial policy is random and exogenously determined, the ex post comparison of utility across states depends upon whether import or export tariffs are used; and (iii) when endowments are random, implying the optimal tariff varies across states, the introduction of asset markets may be welfare-reducing when only import tariffs are used.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of International Economics.
Volume (Year): 35 (1993)
Issue (Month): 3-4 (November)
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Web page: http://www.elsevier.com/locate/inca/505552
Other versions of this item:
- Barari, Mahua & Lapan, Harvey E., 1993. "Stochastic Trade Policy with Asset Markets: The Role of Tariff Structure," Staff General Research Papers 10042, Iowa State University, Department of Economics.
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- Francois, Joseph & Martin, Will, 2002.
"Commercial Policy Variability, Bindings and Market Access,"
CEPR Discussion Papers
3294, C.E.P.R. Discussion Papers.
- Francois, Joseph F. & Martin, Will, 2004. "Commercial policy variability, bindings, and market access," European Economic Review, Elsevier, vol. 48(3), pages 665-679, June.
- Joseph Francois & Will Martin, 2002. "Commercial Policy Variability, Bindings, and Market Access," International Trade 0210002, EconWPA.
- Michael Dueker, 1995. "Tariffs and asset market structure: some basic comparative dynamics," Working Papers 1995-009, Federal Reserve Bank of St. Louis.
- Michael R. Pakko, 1996. "Tariff risk and international borrowing with incomplete asset markets," Working Papers 1996-011, Federal Reserve Bank of St. Louis.
- Joseph F. Francois & Will Martin, 1998. "Commercial Policy Uncertainty, the Expected Cost of Protection, and Market Access," Tinbergen Institute Discussion Papers 98-059/2, Tinbergen Institute.
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