Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Impact of Permanent and Temporary Import Surcharges on the U.S. Trade Deficit

Contents:

Author Info

  • Barry Eichengreen and Lawrence H. Goulder.

Abstract

This paper uses analytical and simulation models to study the impact of temporary and permanent import surcharges on the U.S. balance of trade. The analytical model of a two-country, two-commodity, two-period endowment economy brings out the intersectoral and intertemporal substitution effects generated by import surcharges. This model shows that the trade balance impact of these initiatives is ambiguous in sign even under restrictive assumptions. We therefore apply a simulation model to gauge the effects under realistic values for parameters. The simulation model differs from others that have analyzed import surcharges in combining sectoral disaggregation with an integrated treatment of current and capital account transactions. The combination is made possible by the model's attention to both intra- and intertemporal aspects of household and producer decisions. Simulations are performed under different assumptions about the sources of the U.S. trade deficits and the timing of the surcharge. In each case, surcharges strengthen the trade balance in the short run but worsen subsequently. The results highlight the usefulness of analyzing the crade balance effects of commercial policies with a dynamic framework that incorporates intertemporal balance of payments constraints.

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://papers.nber.org/papers/W3391
Download Restriction: no

Bibliographic Info

Paper provided by University of California at Berkeley in its series Economics Working Papers with number 90-145.

as in new window
Length:
Date of creation: 01 Jul 1990
Date of revision:
Handle: RePEc:ucb:calbwp:90-145

Contact details of provider:
Postal: University of California at Berkeley, Berkeley, CA USA
Phone: 510-642-0822
Fax: 510-642-6615
Email:
Web page: http://www.haas.berkeley.edu/groups/iber/wps/econwp.html
More information through EDIRC

Order Information:
Postal: IBER, F502 Haas Building, University of California, Berkeley CA 94720-1922
Email:

Related research

Keywords:

Other versions of this item:

References

References listed on IDEAS
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.:
as in new window
  1. Lawrence H. Goulder & Barry Eichengreen, 1989. "Savings Promotion, Investment Promotion, and International Competitiveness," NBER Chapters, in: Trade Policies for International Competitiveness, pages 5-52 National Bureau of Economic Research, Inc.
  2. Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526.
  3. Svensson, Lars E O & Razin, Assaf, 1983. "The Terms of Trade and the Current Account: The Harberger-Laursen-Metzler Effect," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 97-125, February.
  4. Gardner, Grant W. & Kimbrough, Kent P., 1989. "Tariffs, interest rates, and the trade balance in the world economy," Journal of International Economics, Elsevier, vol. 27(1-2), pages 91-110, August.
  5. Lawrence H. Summers, 1981. "Taxation and Corporate Investment: A q-Theory Approach," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 12(1), pages 67-140.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Keuschnigg, Christian & Kohler, Wilhelm K., 1994. "Commercial Policy and Dynamic Adjustment Under Monopolistic Competition," CEPR Discussion Papers 1037, C.E.P.R. Discussion Papers.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ucb:calbwp:90-145. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.