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Domestic Input Policies in Free Trade Areas with National Asymmetries

Author

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  • Yann Duval

    (Asian Institute of Technology, School of Management)

Abstract

This paper combines some of the most realistic components of the competitive and strategic trade literature to examine both socially and individually optimal domestic input policies in free trade areas (FTAs). When asymmetries in the number of firms, in the number of consumers, or in production costs exist across countries, tax harmonization is not optimal and input taxes depend on the shape of the production process and the degree of imperfect competition. The presence of input tax asymmetries in a customs union or FTA does not constitute evidence of strategic behavior at the national level.

Suggested Citation

  • Yann Duval, 2002. "Domestic Input Policies in Free Trade Areas with National Asymmetries," Eastern Economic Journal, Eastern Economic Association, vol. 28(2), pages 241-253, Spring.
    • Handle: RePEc:eej:eeconj:v:28:y:2002:i:2:p:241-253
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume28/V28N2P241_253.pdf
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    References listed on IDEAS

    as
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    6. Lahiri, Sajal & Raimondos-Moller, Pascalis, 1998. "Public good provision and the welfare effects of indirect tax harmonisation," Journal of Public Economics, Elsevier, vol. 67(2), pages 253-267, February.
    7. Dixit, Avinash, 1984. "International Trade Policy for Oligopolistic Industries," Economic Journal, Royal Economic Society, vol. 94(376a), pages 1-16, Supplemen.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Free Trade; Strategic Trade; Trade;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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