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Tariff Wars and Trade Deals With Costly Government

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Author Info
John B. Burbridge () (McMaster University)
Gordon M. Myers () (Simon Fraser University)
Abstract

We study a simple model of tariff wars and trade deals in which government revenue collection and disbursement uses resources. The introduction of a costly government leads to lower non-cooperative tariffs, the possibility that a less costly government may win a tariff war, and fully cooperative trade deals where countries lower tariffs but do not eliminate them, even with lump-sum taxes and transfers.

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File URL: http://www.econ.sfu.ca/research/RePEc/sfu/sfudps/dp00-15.pdf
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Publisher Info
Paper provided by Department of Economics, Simon Fraser University in its series Discussion Papers with number dp00-15.

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Length: 17 pages
Date of creation: 2000
Date of revision: 08 Jun 2000
Handle: RePEc:sfu:sfudps:dp00-15

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Postal: Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada
Phone: (778)782-3508
Fax: (778)782-5944
Web page: http://www.econ.sfu.ca/
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Postal: Working Paper Coordinator, Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada
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