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Trade Reform Diagnostics with Many Households, Quotas, and Tariffs

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  • Anderson, James E

Abstract

Revenue-neutral trade reform is desirable if revenues are made up from less costly distortions. With a particular computable general-equilibrium model, reforms can be evaluated, but the robustness of conclusions is suspect; they depend on a particular specification and parameterization of the model economy. This paper provides a diagnostic toolkit which permits sensitivity analysis across model specifications and parameterizations, notably allowing for heterogeneous households. Novel elements include emphasis on the concept of compensated marginal cost of funds (MCF) necessary to sensitivity analysis, development of the MCF of quotas, and analysis of the relationship between aggregate MCF and social welfare. Copyright 2002 by Blackwell Publishing Ltd.

Suggested Citation

  • Anderson, James E, 2002. "Trade Reform Diagnostics with Many Households, Quotas, and Tariffs," Review of International Economics, Wiley Blackwell, vol. 10(2), pages 215-236, May.
  • Handle: RePEc:bla:reviec:v:10:y:2002:i:2:p:215-36
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    Cited by:

    1. Knud Munk, 2008. "Tax-tariff reform with costs of tax administration," International Tax and Public Finance, Springer;International Institute of Public Finance, pages 647-667.
    2. Francois, Joseph & Wignaraja, Ganeshan, 2008. "Economic Implications of Deeper Asian Integration," CEPR Discussion Papers 6976, C.E.P.R. Discussion Papers.
    3. Francois, Joseph & Rojas-Romagosa, Hugo, 2011. "Household inequality, social welfare, and trade," Journal of Development Economics, Elsevier, pages 422-431.
    4. Emran, M. Shahe & Stiglitz, Joseph E., 2005. "On selective indirect tax reform in developing countries," Journal of Public Economics, Elsevier, pages 599-623.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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