The Protective Effect of a Tariff Under Uncertainty
AbstractWe examine the protective effect of a tariff in a small economy with uncertainty and a stock market in which shares of firms are traded. In a deterministic economy, the allocation of resources is governed by commodity prices; in our economy, it is governed by equity prices and is dependent on commodity prices only to the extent that they influence equity prices. We show that in the absence of international trade in securities a tariff need not protect the import competing sector. In the presence of international trade in securities, a tariff always protects the import competing sector.
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Bibliographic InfoPaper provided by Harvard University Department of Economics in its series Scholarly Articles with number 3445093.
Date of creation: 1978
Date of revision:
Publication status: Published in Journal of Political Economy -Chicago-
Other versions of this item:
- Helpman, Elhanan & Razin, Assaf, 1978. "The Protective Effect of a Tariff under Uncertainty," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 1131-41, December.
- Elhanan Helpman & Assaf Razin, 1978. "The Protective Effect of a Tariff Under Uncertainty," Discussion Papers 312, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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.:
- Helpman, Elhanan & Razin, Assaf, 1978. "Uncertainty and International Trade in the Presence of Stock Markets," Review of Economic Studies, Wiley Blackwell, vol. 45(2), pages 239-50, June.
- Faia, Ester, 2002.
"Monetary policy in a world with different financial systems,"
Working Paper Series
0183, European Central Bank.
- Ester Faia, 2004. "Monetary policy in a world with different financial systems," Money Macro and Finance (MMF) Research Group Conference 2003 28, Money Macro and Finance Research Group.
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