Specific and Ad Valorem Tariffs Are Not Equivalent in Trade Wars
AbstractThis note argues that when two countries choose optimal tariffs in a trade war, specific tariffs are not equivalent to ad valorem tariffs even if all markets are competitive. In particular, it shows that if a country's trading partener switches a specific tariff to an an valorem tariff that yields the same revenue at the initial trade point, the former country has an incentive to lower its tariffs.
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Bibliographic InfoPaper provided by Exeter University, Department of Economics in its series Discussion Papers with number 9602.
Length: 9 pages
Date of creation: 1996
Date of revision:
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Postal: Streatham Court, Rennes Drive, Exeter EX4 4PU
Phone: (01392) 263218
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Web page: http://business-school.exeter.ac.uk/about/departments/economics/
More information through EDIRC
TRADE POLICY; INTERNATIONAL TRADE;
Other versions of this item:
- Lockwood, Ben & Wong, Kar-yiu, 2000. "Specific and ad valorem tariffs are not equivalent in trade wars," Journal of International Economics, Elsevier, vol. 52(1), pages 183-195, October.
- Kar-yiu Wong & Ben Lockwood, 1997. "Specific and Ad Valorem Tariffs are not Equivalent in Trade Wars," Discussion Papers in Economics at the University of Washington 0081, Department of Economics at the University of Washington.
- Kar-yiu Wong & Ben Lockwood, 1997. "Specific and Ad Valorem Tariffs are not Equivalent in Trade Wars," Working Papers 0081, University of Washington, Department of Economics.
- F10 - International Economics - - Trade - - - General
- F11 - International Economics - - Trade - - - Neoclassical Models of Trade
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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