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International Quota Transfer and Intermediate Goods

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Author Info
Aldanondo, Ana-Maria
Puertolas, Javier
Abstract

In this paper we use a general equilibrium model to examine the effects of international quota transfer when a quota restricts world commodity production whilst the trade in an intermediate good is not regulated. The analysis shows that, when the quota regime is not internationally transferable, intermediate input trade substitutes for final good trade. In these circumstances, the distortions are lower than expected. International quota transfer increases world welfare proportionally to quota rent gap. Welfare distribution is also conditioned by commodity terms of trade and, particularly, by the outcome of the intermediate good price.

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Paper provided by European Association of Agricultural Economists in its series 2002 International Congress, August 28-31, 2002, Zaragoza, Spain with number 24851.

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Date of creation: 2002
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Handle: RePEc:ags:eaae02:24851

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Related research
Keywords: Production quota; international trade; intermediate goods; International Relations/Trade;

References listed on IDEAS
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  1. Spencer, Barbara J. & Jones, Ronald W., 1992. "Trade and protection in vertically related markets," Journal of International Economics, Elsevier, vol. 32(1-2), pages 31-55, February. [Downloadable!] (restricted)
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  2. Parry, Ian, 1997. "Agricultural Policies in the Presence of Distorting Taxes," Discussion Papers dp-98-05, Resources For the Future. [Downloadable!]
  3. Lilyan E. Fulginiti & Richard K. Perrin, 2005. "An Allais Measure of Production Sector Waste Due to Quotas," Public Economics 0502017, EconWPA. [Downloadable!]
  4. Sanyal, Kalyan K & Jones, Ronald W, 1982. "The Theory of Trade in Middle Products," American Economic Review, American Economic Association, vol. 72(1), pages 16-31, March. [Downloadable!] (restricted)
  5. Bureau, Jean-Christophe, et al, 1997. "Quota Mobility in the European Sugar Regime," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 24(1), pages 1-30.
  6. Fulginiti, Lilyan & Perrin, Richard, 1994. "Measures of Waste Due to Quotas," Staff General Research Papers 776, Iowa State University, Department of Economics.
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  7. Neary, J. P. & Roberts, K. W. S., 1980. "The theory of household behaviour under rationing," European Economic Review, Elsevier, vol. 13(1), pages 25-42, January. [Downloadable!] (restricted)
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  8. Fulginiti, Lilyan & Perrin, Richard, 1993. "The Theory and Measurement of Producer Response under Quotas," The Review of Economics and Statistics, MIT Press, vol. 75(1), pages 97-106, February. [Downloadable!] (restricted)
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