Optimal Trade Policies for a Developing Country under Uncertainty
AbstractThis paper investigates optimal trade policies for a developing, small open economy that faces international price uncertainly. Trade taxes are used to finance provision of a public good, which enters the utility function of consumers. If demands for private goods are independent of the public good, the optimal composite tariff dominates the optimal quota. If the optimal state-contingent tariff increases with the foreign price, the optimal specific tariff also dominates the optimal quota, regardless of risk aversion. However, the ranking of the optimal specific tariff and the optimal quota generally depends on risk attitudes as well as ordinal preferences.
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Bibliographic InfoPaper provided by Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University in its series Food and Agricultural Policy Research Institute (FAPRI) Publications with number 90-gatt8.
Date of creation: Jul 1991
Date of revision:
Other versions of this item:
- Kwan Choi, E. & Lapan, Harvey E., 1991. "Optimal trade policies for a developing country under uncertainty," Journal of Development Economics, Elsevier, vol. 35(2), pages 243-260, April.
- Choi, E. Kwan & Lapan, Harvey E., 1990. "Optimal Trade Policies for a Developing Country Under Uncertainty," Working Papers 51263, International Agricultural Trade Research Consortium.
- E. Kwan Choi & Harvey E. Lapan, 1991. "Optimal Trade Policies for a Developing Country under Uncertainty," Center for Agricultural and Rural Development (CARD) Publications 90-gatt8, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Choi, E. Kwan & Lapan, Harvey E., 1991. "Optimal Trade Policies for a Developing Country Under Uncertainty," Staff General Research Papers 478, Iowa State University, Department of Economics.
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- Choi, E. Kwan & Feinerman, Eli, 1995. "Regulation Of Nitrogen Pollution: Taxes Versus Quotas," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(01), July.
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